Return on Ad Spend (ROAS) is the average dollar amount each $1.00 invested in advertising returns to the business. ROAS can viewed as currency based metric, or percentage. Any output over $1.00, or 100% is a positive ROAS. This metric can be analyzed by the hour of the day, day of the week, device types and demographics to look for standout audience segments who contribute higher revenue amounts or order values, thus generating a higher return on ad spend.
To calculate return on ad spend, enter the total advertising spend below and the total amount of revenue that resulted from the ad spend.
Return on Ad Spend (ROAS) Excel Formula
Spend: Spend is the net advertising cost. This does not include management fees, creative or anything else - purely the advertising hard cost.
Impressions: Impressions are the amount of times ads appeared, or were shown, in the given channel. Essentially how many ads were served by the advertising spend.
Click-through Rate (CTR): CTR is the rate at which impressions result in a viewer of the ad clicking on it. If 100 ads are shown and 1 person clicks, that is a 1% CTR. Clicks / Impressions = CTR
Clicks: Clicks are the amount of people who clicked on, or took an action on an ad. The click metric is also commonly associated with the number of website visitors.
Cost-per-click (CPC): Cost-per-click is the average amount paid in advertising spend per click on the ad. Spend / Clicks = CPC
Conversions: Conversions - which could be sales, leads, downloads, email opt-ins - is the total volume of conversion actions attributed to the ad spend.
Conversion Rate: Conversion rate is the rate at which a click turns into a conversion action such as a lead form submission, ebook download, email opt-in, sale, etc. Conversions / Clicks = Conversion Rate
Cost / Conv.: Cost-per-conversion is the average amount of advertising spend invested per resulting conversion action. Spend / Conversions = Cost-Per-Conversion