ROAS (return on ad spend) is the revenue or conversion value attributed to advertising divided by what you spent on that advertising. Spend $1 and attribute $5 in sales, and ROAS is 5:1, or 500%. It is a channel and campaign metric, and it is only as trustworthy as the attribution behind it.
What is ROAS?
Google Ads defines a target ROAS as the average conversion value (for example, revenue) you want for each dollar spent on ads, expressed as a percentage, with the example $5 in sales ÷ $1 in ad spend × 100% = 500%.1Source 1 · Google Ads HelpAbout Target ROAS biddingsupport.google.com Ad platforms report it per campaign, ad set or keyword, which makes it the everyday metric for bidding and budget shifts.
Worked example
| Campaign | Spend | Attributed revenue | ROAS | Gross profit after media (60% margin) |
|---|---|---|---|---|
| Search, brand | $4,000 | $36,000 | 9.0 | $17,600 |
| Search, non-brand | $10,000 | $34,000 | 3.4 | $10,400 |
| Paid social, prospecting | $6,000 | $16,000 | 2.7 | $3,600 |
| Total | $20,000 | $86,000 | 4.3 | $31,600 |
Brand search looks best, but many of those buyers were already searching for you. That is the core problem with attributed ROAS: in 15 large advertising experiments at Facebook, Gordon and colleagues found that observational measurement methods often failed to reproduce the effects measured by randomized experiments.2Source 2 · Gordon, Zettelmeyer, Bhargava & Chapsky, Marketing Science, 2019A Comparison of Approaches to Advertising Measurement: Evidence from Big Field Experiments at Facebookkellogg.northwestern.edu Google’s Conversion Lift reports iROAS, incremental conversion value divided by spend, from a treatment-versus-control test.3Source 3 · Google Ads HelpAbout Conversion Liftsupport.google.com
Common mistakes
- Summing platform ROAS across channels. Each platform credits itself for overlapping conversions; use MER for the blended view.
- Optimizing to ROAS without margin. A 3.0 ROAS loses money on a product with a 30% gross margin.
- Comparing ROAS across attribution windows (7-day click vs 1-day view) as if they were the same metric.
- Treating high-ROAS retargeting as proof of impact without an incrementality test.
How to track ROAS in Kimo
Kimo pulls spend and platform conversions from Google Ads, Meta, LinkedIn and TikTok, and joins them to actual orders from Shopify or Stripe. The Command center shows platform ROAS, your own modeled ROAS and blended MER side by side, so you see where they disagree. Read Blended ROAS without lying for the method.
Frequently asked questions
What is a good ROAS?
What is the difference between ROAS and ROI?
What is the difference between ROAS and MER?
Sources
3 references- About Target ROAS bidding (opens in a new tab)Google Ads Helpsupport.google.com
Target ROAS definition and the $5 ÷ $1 × 100% = 500% example.
- A Comparison of Approaches to Advertising Measurement: Evidence from Big Field Experiments at Facebook (opens in a new tab)Gordon, Zettelmeyer, Bhargava & Chapsky, Marketing Science2019kellogg.northwestern.edu
15 US experiments; observational methods often fail to match randomized results.
- About Conversion Lift (opens in a new tab)Google Ads Helpsupport.google.com
Incremental conversions, incremental CPA and iROAS.
External sources were accessed at the time of writing. Kimo product details, customers and figures in examples are illustrative unless a source is cited.
