Ad glossary · Performance metrics · Checked 2026-10-23
What is ROAS: how return on ad spend is worked out and how to tell if it pays
ROAS (return on ad spend) is the revenue attributed to ads divided by what the ads cost: spend NT$1, get NT$4 of revenue, and ROAS is 4.
- English
- ROAS (return on ad spend)
- Also called
- Return on ad spend
- Area
- Performance metrics
How it is used
ROAS counts revenue, not profit. To tell whether you are making money, work out break-even ROAS from your gross margin first; only a reported ROAS above it is profitable. The ROAS in a Meta report is counted under the attribution setting and will differ from what your store actually took.
A high ROAS is not the same as profit
ROAS has revenue on top, so nothing has been taken out for goods, shipping or payment fees. At the same ROAS of 3, a 60%-margin business turns every 100 spent into 80 of margin, while a 25%-margin one loses 25.
So first work out break-even ROAS (1 ÷ gross margin) and compare the reported figure with it. Above it the ads pay; below it every extra sale loses a little more.
Why the ROAS in Meta differs from your store
Meta counts only purchases inside the attribution setting that it can match: by default 7-day click, 1-day view and 1-day engaged-view. Unmatched purchases are left out, and other channels may claim the same order.
Meta, GA4 and the store will never show the same revenue; what matters is whether the gap is stable. For the whole store, use MER (total revenue ÷ total ad spend), which attribution cannot touch.
In Meta, ROAS is also a bid strategy
“ROAS goal” has the system get the most conversion value it can while keeping weekly average ROAS near the target. It needs the maximise value of conversions goal, and Meta recommends at least 50 to 100 conversions a week. Set the target above break-even ROAS.
Formula: plug in your numbers
ROAS = conversion value from ads ÷ ad spend
Example
A shop spends NT$12,000 in a week; Meta reports 40 purchases worth NT$48,000: ROAS = 48,000 ÷ 12,000 = 4.0.
Its gross margin is 50%, so break-even ROAS is 2.0; after shipping, payment fees, packaging and returns the contribution margin is about 33%, so break-even is about 3.0. A reported 4.0 clears both, so more budget is worth considering: once the store’s own takings for the same week back the number up.
Work out your own break-even ROAS
Not to be confused with
ROI: ROI has profit on top, ROAS has revenue. A ROAS of 4 loses money in a business with a 20% gross margin.
FAQ
What is a good ROAS?
There is no universal good number; it depends on your margin. Work out break-even ROAS (1 ÷ gross margin) first; only a reported ROAS above it makes money. For a 50%-margin shop, a ROAS of 2 only breaks even.
How is ROAS different from ROI?
ROAS has revenue on top, ROI has profit. A ROAS of 4 means 4 of revenue for every 1 spent, which can still be a loss once goods, shipping and the ads themselves are paid for.
Where the course puts it to work
- Intermediate, chapter 6: Reading ad data: the four formulas behind the report
- Intermediate, chapter 5: Unit economics: every number you can afford, worked back from margin
- Advanced, chapter 7: E-commerce campaigns: catalogs, dynamic retargeting and value bidding
Official sources
We read each page below on 2026-10-23 and built the definition from it.
- About ROAS goal · Checked 2026-10-23
- About Meta Bid Strategies · Checked 2026-10-23
- About Target ROAS bidding · Checked 2026-10-23
- Measure ecommerce · Checked 2026-10-23
- Margin and unit economics (general accounting; no ad platform defines it) · our definition, not a platform metric