What is ROAS? Insight into your ad performance

Why ROAS is the most important metric in digital advertising

In the world of digital advertising, the terms fly around you. CPC, CPM, CTR. But there is one that you really need to understand if you want to see results. That's ROAS. ROAS stands for Return On Ad Spend. It means how much money you earn back for each euro you spend on ads.

A simple example

You spend €500 on a campaign. This campaign generates €2,000 in turnover. Then your ROAS is 4.0. So you get four times your investment out of it.

Why ROAS is so important

ROAS is the measure of the effectiveness of your ads. It shows you whether your campaigns are profitable or cost money. However, it does more than that.

• You're focusing on profits and not likes. A nice ad is nice but you want results.

• You budget more efficiently. Adsets or target groups with higher ROAS deserve to be scaled up.

• You can report clearly. ROAS is an objective metric for internal communication or collaboration with an agency.

What a good ROAS is

That varies by business. A webshop with low margins often needs a ROAS of 6 to make a profit. A high ticket service provider can already be satisfied with 2.5. Broadly speaking, this is how it works.

• ROAS 1.0 means break even

• Below 1.0 means loss

• Above 1.0 means profit

The higher, the better. Keep in mind that ROAS looks at turnover and not profit. So combine it with margins or other metrics such as POAS or Customer Lifetime Value.

How BigBananas helps with this

BigBananas builds campaigns that are not only beautiful but also perform. Every month, we deliver creatives that are designed to maximize ROAS. Think of A/B test-ready visuals. Motion ads. Smart copy focused on conversion. It's all about advertising profitably.

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