What is ROAS?
Definition: ROAS (return on ad spend) is the revenue your ads earn for every unit of money spent on them: ad revenue divided by ad spend.
ROAS tells you how much revenue each rupee of ad spend brought back. Divide the revenue your ads generated by what you spent on them. A 5× ROAS means ₹5 of sales per ₹1 of ads. pSkyro Labs judges campaigns against each brand's break-even ROAS, not a single target.
What is the ROAS formula?
ROAS = revenue from ads ÷ ad spend. If you spend ₹50,000 and the ads drive ₹2,50,000 in sales, ROAS is 5. It is usually written as 5× or 5.0.
ROAS is not profit. It ignores product cost, shipping and fees. That is why the number to compare it with is your break-even ROAS.
What is break-even ROAS?
Break-even ROAS = 1 ÷ profit margin before ads. It is the lowest ROAS at which your ads do not lose money. The lower your margin, the higher the ROAS you need.
| Margin before ads | Break-even ROAS | What it means |
|---|---|---|
| 25% | 4.0× | Every ₹1 of ads must return ₹4 just to cover costs |
| 40% | 2.5× | ₹2.50 of sales per ₹1 of ads to break even |
| 50% | 2.0× | ₹2 of sales per ₹1 of ads to break even |
| 60% | about 1.7× | Roughly ₹1.67 of sales per ₹1 of ads to break even |
Worked from the formula above; margin is profit per order before ads divided by order value.
Is a higher ROAS always better?
Not always. Very high ROAS often comes from retargeting people who were about to buy anyway, and it can cap growth. Many brands accept a lower ROAS on new-customer campaigns, as long as it stays above break-even and total profit grows. Judge ROAS by campaign role: retargeting usually returns far more than prospecting.
Also check where the number comes from. Platform ROAS is attributed by the ad platform and can differ from what your store or GA4 shows.
A real example: Novo Shoes
In April 2026, Novo Shoes' Meta account spent US$15,939.54 and produced US$110,518.11 in purchase value: 110,518.11 ÷ 15,939.54 = 6.93× ROAS. By campaign, dynamic retargeting returned 13.96× and always-on Advantage+ 7.15×. Figures are from Meta Ads Manager, 1–30 April 2026, and are Meta-attributed.
Questions people ask.
How do you calculate ROAS?
Divide revenue from ads by ad spend. ₹2,00,000 of sales from ₹40,000 of ads is a ROAS of 5.
What is a good ROAS?
One comfortably above your break-even ROAS, which depends on your margin. A brand with a 25% margin needs 4× just to break even; one with a 60% margin breaks even at about 1.7×.
What is the difference between ROAS and ROI?
ROAS counts revenue against ad spend only. ROI counts profit against all costs. A campaign can have a healthy ROAS and still lose money if margins are thin.
What is MER or blended ROAS?
Blended ROAS divides total revenue, from all channels, by total ad spend. Diya Diya's 8× return with us was a blended figure across paid, organic and creator revenue.
Why does platform ROAS differ from my store's numbers?
Ad platforms attribute sales to their own ads using their own windows. Cross-check with GA4 and UTM-tagged orders.
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