Return on Ad Spend (ROAS)
Definition
Return on Ad Spend (ROAS) is a metric that measures the revenue generated for every dollar spent on advertising.
It helps store owners understand the effectiveness of their marketing campaigns.
Good or Bad?
Good when your ROAS is significantly higher than 1
Bad if your ROAS is below 1, meaning you’re spending more than you’re earning from ads
Why is it matter?
ROAS tells you if your ad budget is bringing in actual revenue.
Without tracking it, you could be wasting money on campaigns that look good on the surface but don’t actually convert.
It’s one of the clearest indicators of marketing success.
Common Mistakes
- Not tracking ROAS by channel
- Ignoring attribution and giving all credit to last click
- Relying only on platform-reported data (like from Facebook or Google Ads)
How to Improve It?
- Refine audience targeting to reduce wasted clicks
- Use high-converting landing pages
- Track ROAS across platforms and time ranges
- A/B test creatives and headlines
Recommended Plugin
Pixel Manager for WooCommerce
It helps you set up advanced tracking for Facebook, Google Ads, and more.
You can monitor ROAS and optimize ad performance directly from your WooCommerce dashboard.
Real-World Example
You spend $500 on Facebook ads in a week.
Those ads bring in $2,000 in revenue.
Your ROAS is 4.
For every dollar spent, you earned four.
Related Terms
- Conversion Rate
- Customer Acquisition Cost
- Average Order Value
- Lifetime Value
FAQs
What is a good ROAS for WooCommerce stores?
It depends on your product margin.
For high-margin products, a ROAS of 2 or more may be enough.
For low-margin products, you may need a ROAS of 4 or higher.
Can ROAS replace profit tracking?
No, ROAS measures revenue, not profit.
You still need to track costs to understand actual profitability.
How can I track ROAS in WooCommerce?
Use ad platforms with conversion tracking plus plugins like Pixel Manager or analytics tools to monitor ROAS by product or campaign.
