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0551 044 08 69 ekip@racoun.com
26 Ekim 2026 · Racoun

What is ROAS and how is it calculated?

ROAS (return on ad spend) shows how much revenue each unit of ad spend generates. It is calculated by dividing ad revenue by ad spend, and a healthy target depends on your profit margin.

Short answer: ROAS (return on ad spend) shows how much revenue each unit of advertising spend generates. Formula: ROAS = ad revenue ÷ ad spend. Spending 1 unit to earn 5 units gives a ROAS of 5 (5:1).

A “good” ROAS depends on your margin. Break-even ROAS = 1 ÷ profit margin (as a decimal); with a 0.25 contribution margin, break-even ROAS is 4.

  • ROAS measures revenue efficiency of ad spend only.
  • ROI includes all costs and shows real profitability.
  • CPA is spend divided by conversions, useful for leads.

ROAS can mislead when tracking is broken, platforms double-count conversions, brand searches inflate results or returns are ignored. Improve it by fixing measurement, focusing on high-margin products, optimising landing pages, testing creatives and separating prospecting from retargeting. Racoun sets ROAS targets from client margins and validates platform data against real orders.

Talk to Racoun: we are based in Istanbul and work with brands across Türkiye. Message us on WhatsApp or email ekip@racoun.com.