ROAS (Return on Ad Spend) measures the revenue generated for every dollar spent on advertising. It is the inverse of ACOS. A ROAS of 4x means $4 in revenue for every $1 of ad spend.
ROAS provides a clear picture of advertising profitability and helps sellers compare performance across campaigns, keywords, and ad types. Higher ROAS indicates more efficient advertising.
RIDGE reports benchmark ROAS across your niche competitors and model expected ROAS ranges for different advertising strategies, from aggressive launch campaigns to steady-state optimization.
With $500 in weekly ad spend generating $2,000 in ad-attributed sales, your ROAS is 4.0x (equivalent to 25% ACOS). If your break-even ROAS is 2.8x, this campaign is profitable.