Return on Advertising Spend
Ratio
The revenue generated for every dollar spent on advertising. Evaluates the effectiveness of the advertising campaign in terms of revenue generation.
Formula
(Revenue from Ad Campaign - Cost of Ad Campaign) / Cost of Ad Campaign
Example
If a company spends $20,000 on a TV ad and generates $100,000 in sales, the ROAS is 4:1, or $4 for every $1 spent.