ROAS (Return on Ad Spend) measures revenue generated per dollar of ad spend. If you spend $10,000 on ads and generate $40,000 in revenue, your ROAS is 4x. It’s useful for comparing campaign performance, but it ignores your margins, agency fees, and operational costs.
ROI (Return on Investment) accounts for everything — ad spend, management fees, landing page costs, your team’s time. A 4x ROAS campaign might only deliver 1.5x true ROI once you factor in costs. That might be great for a SaaS business with high lifetime value, or terrible for a low-margin ecommerce product.
The right target depends on your unit economics: margins, customer lifetime value, and growth goals. A “good” ROAS for one business is break-even for another. Read our guide on maximizing ad ROI to see how we calculate targets that actually map to profit, not vanity metrics.