How Return on Ad Spend (ROAS) Works
If ads receive credit for $40,000 in revenue on $10,000 in spend, reported ROAS is 4.0, often written as 4× or 400%.
A Simple Example
A 4× ROAS can be profitable for a high-margin product and unprofitable for a low-margin product with heavy fulfillment costs.
Why Return on Ad Spend (ROAS) Matters
ROAS is a fast measure of revenue efficiency and a common bidding target.
Common Misreading
ROAS ignores margin, fees and incrementality unless those are built into the value. Higher ROAS can also coincide with lower total profit if spend is constrained too aggressively.