What is ROAS?
ROAS (return on ad spend) is the revenue your ads are credited with, divided by what those ads cost. It says how much comes back for each dollar spent, before any cost of making or shipping the order. On its own it says nothing about profit; that comes from comparing it with your break-even ROAS.
The formula
Revenue here is the sales the ads are credited with, before any costs. ROAS on its own says nothing about profit; set it against your break-even ROAS to see whether the ads make money.
Worked example
Every $1 of ad spend brought back $4.20 in sales.
Using it on Meta ads
In Ads Manager, ROAS is purchase conversion value divided by amount spent, over the dates you pick. Read it per campaign and per ad set, and check the same dates in your store, since Meta counts sales inside its attribution window.
Because each platform counts its own sales, many brands also watch MER, which uses the store's total revenue. When ROAS drops, the CPA calculator shows whether purchases got more expensive.
Questions
Divide the revenue your ads brought in by what you spent on those ads over the same dates. $12,600 in sales from $3,000 of spend is a 4.20× ROAS.
No. ROAS divides revenue by ad spend. ROI divides profit by total cost, so it accounts for product cost, shipping and everything else an order takes.
Any ROAS above your break-even ROAS makes money on the first order. That line depends on your margins, so a ROAS that is good for one store can lose money for another.
Meta credits a sale to an ad when it happens inside its attribution window, for example within seven days of a click or one day of a view. Your store records every sale, wherever it came from. The two answer different questions, so they rarely match.
