ROAS
ROAS stands for return on ad spend: the revenue you get back for every euro you spend on ads. If you spend €1,000 and that brings in €4,000 in revenue, your ROAS is 4, also written as 400 per cent. It's the most widely used measure for judging whether a campaign pays off.
- 2 min read
How do you calculate ROAS?
Revenue from ads divided by ad costs. That's all there is to it. The difficulty isn't in the formula but in the two numbers: which revenue do you attribute to the ad, and over what period?
What is a good ROAS?
That depends entirely on your margin. A webshop with a 20 per cent margin still makes a loss at a ROAS of 4: of every €4 of revenue, 80 cents is left, while you advertised for €1. A service provider with a 70 per cent margin does excellently at that same ROAS.
So work back from your break-even: divide 1 by your gross margin. At a 30 per cent margin, your break-even ROAS is roughly 3.3. Everything above that is profit, everything below it costs money, however good the number looks.
Where it usually goes wrong
You only measure the last click
Ads that introduce people to your brand for the first time get no revenue attributed, even though they contribute. You then switch them off and see your total result drop.
You calculate with revenue instead of margin
ROAS says nothing about profit. Two campaigns with the same ROAS can turn out completely differently if they sell different products.
Your measurement leaks
Missing conversions due to consent, a thank-you page that counts twice or a form that doesn't send an event make your ROAS structurally too low or too high. Check your measurement before you start steering on ROAS.
You look at one month
With services that have a long lead time, the revenue comes later than the click. A campaign that looks poor in month one can be the best in month three.
ROAS or CPA?
If you sell products at different prices, ROAS makes sense. If you deliver services where every enquiry is worth about the same, cost per enquiry works better, because you then don't have to attribute revenue to a lead that only becomes a customer weeks later.
Steering on ROAS only works if your measurement is right. We set that up in Google Ads and then test the landing page With conversion optimisation. At a car detailing business in the Arnhem region it came out at a ROAS of 6.25. Also read about ad budget.
Frequently asked questions
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Wat is het verschil tussen ROAS en ROI?
ROAS deelt de omzet uit advertenties door de advertentiekosten. ROI kijkt naar winst: wat je overhoudt na alle kosten, zoals inkoop, arbeid en advertenties, gedeeld door je investering. Een campagne kan dus een hoge ROAS hebben en toch een lage of negatieve ROI.
Waar zie je je ROAS in Google Ads?
In Google Ads heet het conversiewaarde per kosten, een kolom die je aan je overzicht toevoegt. Die werkt alleen als je aan conversies een waarde meegeeft, bijvoorbeeld de omzet van een verkoop of een vaste waarde per aanvraag. Zonder kloppende conversion tracking zegt dat getal weinig.
Is ROAS geschikt voor een dienstverlener zonder webshop?
Alleen als je de omzet van een klus terugkoppelt naar de advertentie, bijvoorbeeld met Offline conversions uit je CRM. Doe je dat niet, stuur dan op kosten per aanvraag of kosten per getekende offerte. Die cijfers sluiten aan op hoe een vakbedrijf verkoopt.
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