Unit economics
ROAS
Revenue attributed to advertising divided by the advertising spend — a channel efficiency ratio, not a profitability one.
Also called Return on ad spend · ДРР · ROMI
Formula
ROAS = Attributed revenue ÷ Ad spend
- Attributed revenue
- whatever the platform's attribution model credits to the campaign
Break-even ROAS = 1 ÷ Contribution margin. At a 32 % contribution margin, a campaign needs ROAS above 3.1 merely to avoid losing money.
ROAS is denominated in revenue, so it is blind to the cost of what was sold. Two campaigns at identical ROAS can be one profitable and one ruinous if they sell different products, and no amount of optimisation inside the platform will surface that.
It is also self-reported by the party being evaluated. The platform decides what it is responsible for, and every platform's model credits itself generously.
- Contribution margin
- 32 %
- Reported ROAS
- 2.8
- Break-even ROAS
- 1 ÷ 0.32 = 3.1
A campaign reporting 2.8 against a 3.1 break-even is losing money on every order while the dashboard shows a positive return. Nothing in the ad account will say so.
Teams inherit a target — 4, or 5 — with no memory of where it came from, and defend it after the product mix has changed enough to move break-even. Recompute break-even ROAS whenever margin moves, and set the target from it rather than from habit.
Quantities derived from the counts. Each is only as sound as the definitions beneath it.
Cannot be computed without
- Attribution
- The rule that decides which touchpoint gets credit for a sale — a modelling choice, never a fact.
Knowing the definition is not the same as being able to check the figure. These are the procedures that do the second thing.
- Testing a growth number you were given
- “Conversion is up 6.4×. Revenue grew 40%. Abandoned carts down 65%.” · 30 minutes, 5 questions.
A definition proves nothing. These are the places on this site where this quantity was actually computed, with the period and whose figure it is stated beside each one.
AED 1,111.04 of media returned AED 35,600 in enrolments — a return on ad spend of 32.0×, which the record publishes beside a return on marketing investment of 3,104%. Four conversions is a small sample, so the whole confidence interval is published rather than the point estimate, and the finding survives its own worst case.
AED 1,111 of test spend, AED 35,600 back · 30 April 2025 · our measurement
A definition is free. Being answerable for the figure it produces is the part that is bought, and this term is a working part of the engagements below.
- Digital marketing for Dubai and the UAE
- Spend follows contribution margin, not volume.
The definitions are the easy part. Whether the figure on your dashboard was computed this way is a different question, and usually the more expensive one.