ROAS
Category: Marketing
Also searched as: Return on ad spend
Definition (plain English)
Return on ad spend compares revenue generated by advertising with the amount spent on that advertising.
Why it matters commercially
ROAS can look strong while profit is weak if the product has low margin, high freight, high return rate, or expensive fulfillment.
Example
A campaign showed 5x ROAS, but after COGS, marketplace fees, pick-pack, and refunds the order group barely broke even.
Common mistake
Optimizing to revenue ROAS instead of contribution after product cost, landed cost, fees, discounts, and fulfillment.
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