ROAS (Return on Ad Spend) measures how much revenue is generated for every dollar spent. It is the most important number to watch in gauging your campaign's success.
Facebook ROAS lets you evaluate if your ads are working if they’re a good return on investment.
ROAS = Total Revenue generated from your ad divided by your total ad spend.
For example:
Revenue generated by the campaign $12,000
Total ad campaign spend / $3,000
ROAS 4
This shows us that for every $1 we spent on advertising we generated $4 back in revenue. That’s a 4X ROAS.
What is a good return on ad spend?
There is no blanket rule on what a good ROAS is for your campaign as it varies depending on the goal of the campaign, your industry and other things like the age of your brand.
If you are new entering into a market a low ROAS might be acceptable as your brand works on building awareness to those users.
Having a return on ad spend of 4:1 or higher is a sign of a successful campaign.
While a ROAS of 3:1 or lower indicates that the campaign needs attention.