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Return on ad spend

Return on ad spend (ROAS) is a marketing metric that measures the revenue generated from advertising efforts compared to the cost of those efforts. It helps businesses understand the effectiveness of their advertising campaigns and make informed decisions on where to allocate their marketing budget.

ROAS is calculated by dividing the revenue generated from advertising by the cost of the advertising campaign. For example, if a company spends $1,000 on advertising and generates $5,000 in revenue, the ROAS would be 5 ($5,000/$1,000 = 5).

A ROAS of 1 indicates that the company is breaking even on their advertising efforts, while a ROAS greater than 1 means that the company is generating a profit from their advertising campaigns. A ROAS of less than 1 means that the company is losing money on their advertising efforts.

Businesses can use ROAS to optimize their advertising strategies, allocate their budget to the most effective channels, and maximize their return on investment. By tracking ROAS, businesses can make data-driven decisions that lead to more efficient and successful advertising campaigns.

For more information on Return on ad spend, you can visit Wikipedia.