Return on Ad Spend (ROAS)

Return on Ad Spend (ROAS)

Return on Ad Spend (ROAS) measures how much revenue you generate for every dollar spent on advertising. For affiliates using paid traffic, ROAS is crucial for determining campaign profitability and scaling decisions.

Calculating ROAS

Basic ROAS Formula

ROAS = Revenue from Ads / Amount Spent on Ads

Example Calculation

• Ad spend: $1,000
• Revenue generated: $4,000
• ROAS = $4,000 / $1,000 = 4:1 (or 400%)

Campaign-Specific ROAS

Campaign ROAS = Campaign Revenue / Campaign Ad Spend

ROAS Benchmarks

Industry Averages

• E-commerce: 4:1 (400%)
• SaaS/Software: 3:1-6:1 (300-600%)
• Digital products: 5:1-10:1 (500-1000%)
• Lead generation: 2:1-4:1 (200-400%)

ROAS Targets

• Break-even: 1:1 (100%)
• Minimum viable: 2:1 (200%)
• Good performance: 4:1 (400%)
• Excellent performance: 6:1+ (600%+)

Improving ROAS

Campaign Optimization

• Audience targeting: Narrow to high-intent audiences
• Ad creative: Test different ad formats and messaging
• Landing pages: Optimize for higher conversion rates
• Bid optimization: Adjust bids for profitable keywords

Funnel Optimization

• Pre-selling: Warm up traffic before affiliate offers
• Retargeting: Re-engage previous visitors
• Email capture: Build lists for future promotions
• Value ladders: Offer multiple price points

Ready to improve your ROAS? Learn advanced strategies for profitable paid traffic campaigns.