# What is ROAS (return on ad spend)?

> ROAS is the revenue your ads bring in for every rupee or dollar you spend on them. Here is the formula, a worked example and what a good ROAS is.
- **Author**: Marxx
- **Published**: 2026-10-21
- **Category**: Metrics
- **URL**: https://marxx.ai/library-glossary/roas

---

ROAS (return on ad spend) is the revenue your ads bring in for every rupee you spend on them. A ROAS of 3 means every INR 1 of ad spend brought back INR 3 in sales.

## The formula

ROAS = revenue from ads / ad spend

## A worked example

You spend INR 50,000 on Meta ads in a month. Ads Manager reports INR 1,75,000 in purchases from those ads.

- ROAS = 1,75,000 / 50,000 = **3.5**
- So each INR 1 of spend brought back INR 3.50 in sales.

That is sales, not profit. If your product costs INR 60 out of every INR 100 sold, the same INR 1,75,000 leaves INR 70,000 after product costs. Take away the INR 50,000 ad bill and you made INR 20,000.

## What is a good ROAS?

There is no single good number. The one that matters is your **break-even ROAS**: the ROAS where ads pay for themselves and nothing more.

Break-even ROAS = 1 / gross margin

| Gross margin | Break-even ROAS |
|---|---|
| 70% | 1.43 |
| 50% | 2.00 |
| 30% | 3.33 |

A brand with a 70% margin makes money at a ROAS of 2. A brand with a 30% margin loses money at the same ROAS. See [break-even ROAS](/glossary/break-even-roas) for the full method.

## Why ROAS can mislead you

- **It counts sales the ads did not cause.** A loyal customer who would have bought anyway still counts if they clicked an ad first.
- **Platforms count generously.** Meta and Google each claim the same sale when a buyer touched both.
- **It ignores repeat buyers.** A first order at ROAS 1.5 can be a good deal if that customer buys four more times.

Many teams track [MER](/glossary/mer) next to ROAS for this reason. MER divides all revenue by all ad spend, so double counting cannot inflate it.

## How to improve ROAS

1. Cut ads whose cost per purchase is above your target for a week or more.
2. Refresh tired creative. A rising cost per purchase on a steady budget is often [ad fatigue](/glossary/ad-fatigue).
3. Raise order value with bundles, so each sale is worth more.
4. Check that your landing page matches the ad. A mismatch kills conversion rate.

## FAQ

### Is ROAS the same as ROI?

No. ROAS divides revenue by ad spend only. ROI divides profit by every cost, including product, shipping and salaries.

### Can ROAS be below 1?

Yes. A ROAS of 0.8 means you got back INR 80 in sales for every INR 100 spent. That can happen with new products and prospecting campaigns.

### Where do I find ROAS in Meta Ads Manager?

Open Columns, choose customise columns, search for ROAS and add "Purchase ROAS (return on ad spend)". Meta works it out as purchase conversion value divided by amount spent (checked 2026-10-20).

Marxx reads ROAS, spend and creative together, so you can see which hook or format is behind a drop. Try the free [ROAS calculator](/roas-calculator) to work out your own break-even number.

---
- [More Metrics articles](https://marxx.ai/library-glossary/category/metrics)
- [All articles](https://marxx.ai/library-glossary)