ROAS is based on revenue, so it doesn't subtract cost of goods or labor. ROAS can be high while the profit left over is small, so real profitability should be looked at together with ROI or margin.
For clinics and professional services, where revenue can't be measured right away, CPA is looked at alongside, based on conversions such as bookings and consultations.
Formula
ROAS (%) = revenue from ads ÷ ad spend × 100
Sample If KRW 1 million in ad spend produced KRW 5 million in revenue, ROAS is 500%.
Frequently asked questions
What is a good ROAS?
It depends on your industry's margin. First calculate the break-even ROAS (1 ÷ margin rate), the point at which ad spend doesn't lose money, and use it as your baseline. With a 25% margin, break-even ROAS is 400%.