Definition
ROAS is the affiliate's and e-commerce buyer's working metric because it needs only two numbers the ad platform already has: what was spent and what the conversions were worth. It ignores product cost, salaries and tools, which makes it quick to read but easy to misread: a ROAS of 2.0 on a product with a 40% margin loses money. Finance teams use ROI for that; media buyers use ROAS to compare sources and creatives within a campaign, where the other costs are the same.
Formula and a worked example
ROAS = attributed revenue ÷ ad spend
Break-even ROAS = 1 ÷ marginA buyer spends $480 on traffic and the conversions pay $720 in offer payouts. ROAS = $720 ÷ $480 = 1.5, or 150%. If the buyer's only cost is media, the margin is $240. For a merchant selling its own product at a 40% gross margin, break-even ROAS is 1 ÷ 0.40 = 2.5; anything below that loses money after the cost of goods.
ROAS vs ROI
| Metric | Formula | Counts | Used by |
|---|---|---|---|
| ROAS | Revenue ÷ ad spend | Media cost only | Media buyers, per campaign or source |
| ROI | (Revenue − total cost) ÷ total cost | All costs | Finance, per business line |
A campaign can have a positive ROAS and a negative ROI. The two are complementary: ROAS tells you which traffic to buy more of, ROI whether the business should be buying it at all.
Measuring ROAS on an ad network
The network knows the spend. It learns the revenue only if the advertiser passes the value of each conversion back through the postback's payout or amount parameter. With that in place, statistics show revenue and ROAS per GEO, source, creative and campaign, which is what makes source-level optimization possible for revenue-based offers such as revshare and e-commerce sales.
Related terms
| Term | Relation | Where defined |
|---|---|---|
| CPA | Cost-side goal metric | Term page |
| Postback URL | How revenue reaches the platform | Term page |
| CTR | Upstream creative metric | Term page |
| Affiliate marketing | Where ROAS is the daily metric | Term page |
FAQ
What is a good ROAS?
Above the break-even for your margin. A pure media buyer sending traffic to CPA offers breaks even at 1.0; a merchant with a 40% margin needs 2.5 before other costs.
What is the difference between ROAS and ROI?
ROAS divides revenue by media spend only; ROI subtracts all costs from revenue and divides by all costs. ROAS compares campaigns; ROI judges the business.
How do I see ROAS in an ad network's reports?
Pass the conversion value in the postback's payout parameter. The platform then shows revenue next to spend and computes ROAS per source, GEO and creative.