You’ve probably come across the term ROAS and wondered what it actually means. Is it just another marketing buzzword—or something you should be paying attention to? You’re about to find out.
In this article, we’ll break down what ROAS is, how to calculate it, and how this little number can help you make smarter decisions when it comes to your advertising budget. And who knows—maybe we’ll even entertain you a bit along the way. 😉
What is ROAS?
ROAS stands for Return On Ad Spend. In plain terms: how much revenue you generate for every dollar (or krona) you spend on advertising.
It’s a key metric that helps you evaluate the performance of your campaigns—whether it’s Google Ads, paid social, or any other type of paid advertising. Unlike ROI, which measures the overall profitability of your business or project, ROAS zooms in on your ad spend specifically.
Think of ROAS as a compass—it helps you steer toward the campaigns that actually deliver results.
How to calculate ROAS
The formula is simple:
ROAS = revenue from ads ÷ cost of ads
Exempel:
If you spend 10,000 SEK on ads and bring in 50,000 SEK in revenue, the calculation looks like this:
50,000 ÷ 10,000 = 5
That means your ROAS is 5. So, for every krona invested, you’re earning five back.
📌 Worth noting: ROAS measures revenue, not profit. So don’t rely on this number alone—but more on that in a second.
What’s considered a good ROAS?
The classic answer: it depends.
What qualifies as a “good” ROAS varies depending on your industry, your business goals, and your margins. If you’re selling high-margin products, a lower ROAS might still be profitable. Others may need a higher number to break even.
A common benchmark is around 3—but that’s a guideline, not gospel. Always evaluate the number based on your specific context.
And don’t forget: a campaign that brings in new customers might not show high ROAS at first, but could deliver long-term value. So keep both short- and long-term perspectives in mind.
ROAS is a tool—not the whole story
Tracking your ROAS is smart, but it won’t give you the full picture. It won’t tell you, for example, how valuable a new customer might be over time—or how your campaign contributes to brand awareness and credibility.
And pro tip: evaluate ROAS on both campaign and ad level. That way, you’ll learn which messages resonate best and where you can fine-tune your strategy for better returns.
In summary: let ROAS be a valuable tool, but don't just stare at the number. When you weigh in more perspectives, you get a more accurate picture of your results — and better decision-making support in the process.
