What is ROAS (Return on Ad Spend)?
ROAS is the revenue generated for every dollar spent on advertising or influencer marketing, calculated by dividing total revenue attributed to the campaign by total spend.
A ROAS of 3x means the brand earned $3 for every $1 spent. Brands use ROAS as the primary metric to compare influencer campaigns against paid social, search, or other channels. It normalises performance across different budget sizes.
Measuring ROAS from influencer content requires reliable attribution, typically via unique discount codes, affiliate links, or UTM-tagged URLs. Without tracking, brands can only estimate revenue impact, which undermines decision-making.
ROAS thresholds vary by category. A DTC brand with high margins might consider 2x ROAS profitable; a low-margin product might need 6x or more. Brands should define their target ROAS before setting campaign budgets.
Related terms
- Conversion rate
- Conversion rate is the percentage of people who took a desired action (purchase, sign-up, click) out of the total who saw or clicked a piece of content or ad.
- Affiliate link
- An affiliate link is a unique tracked URL given to a creator so that any purchase or sign-up made through that link is attributed to that creator, who earns a commission on resulting sales.
- CPM (cost per mille)
- CPM, or cost per mille, is the cost a brand pays per 1,000 impressions or views of a piece of content, used to compare the efficiency of creator and ad placements.
- Sponsored post
- A sponsored post is a piece of content a creator publishes in exchange for payment from a brand, which must be disclosed as advertising under FTC and platform guidelines.
- Influencer marketing
- Influencer marketing is a form of marketing where brands pay social media influencers to promote products to their followers, using the influencer’s trust and reach to drive awareness and sales.
More in Metrics
ROAS (Return on Ad Spend) sits in the metrics part of the glossary. These terms come up in the same conversations and are worth reading alongside it.