Question 1

What is the difference between ROAS and ROI?

Accepted Answer

ROAS divides revenue by ad spend. ROI divides profit (revenue minus all costs, including product cost) by the investment, so ROI is usually much lower and can be negative even when ROAS is above 1.

Question 2

What is a good ROAS?

Accepted Answer

There is no universal number. Work out your break-even ROAS from your gross margin (1 ÷ margin) and aim above it with room for overheads.

Question 3

Can ROAS be below 100%?

Accepted Answer

Yes. A ROAS of 0.8× (80%) means you earned 0.80 in revenue for each 1 spent, which is a loss before even counting product costs.

Question 4

Should I include tax in revenue?

Accepted Answer

Usually not. Use revenue net of sales tax or VAT so that the figure reflects money the business actually keeps.

Your numbers