Glossary

ROAS (return on ad spend)

ROAS (return on ad spend) is revenue divided by advertising cost: $150 of revenue on $100 of spend is a 150% ROAS (or 1.5×). ROI (return on investment) is the profit-based sibling: (revenue − cost) / cost — the same campaign has a 50% ROI. ROAS answers "how hard does my ad dollar work"; ROI answers "what did I actually earn on it".

Using them in practice

Affiliate campaign math usually runs on ROI, because media cost is essentially the whole cost base: 100% ROI means doubling your money. E-commerce leans on ROAS because product margin, not ad spend, dominates the P&L — a store with 30% margins needs roughly 3.3× ROAS just to break even.

Either metric is only as good as its inputs: revenue requires accurate conversion tracking with payouts attached, and spend requires cost data in the same system. Trackers ingest cost via URL parameters or source APIs precisely so ROI can be computed per campaign, placement, and creative instead of once a month in a spreadsheet.

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