ROAS (return on ad spend)
Revenue earned per dollar of ad spend. Spend 1,000, make 4,000, that is 4x ROAS.
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What it is
ROAS is revenue attributed to ads divided by the money spent on them, quoted either as a multiple (4x) or a percentage (400%). Spend 1,000 dollars, book 4,000 dollars of sales, that is 4x. It is the fastest read on whether a campaign is pulling its weight, which is why every ad platform puts it on the dashboard by default.
The number that actually matters is breakeven ROAS, and it comes from your margin: 1 divided by margin. Which margin you use decides whether the answer is real. Use contribution margin, what is left of revenue after payment fees, fulfilment, returns, and every other variable cost, not headline gross margin, or you will set a target that quietly loses money on every order. If gross margin is all you have, label the result 'breakeven before other variable costs' and treat it as a floor. At 25% contribution margin you need 4x just to break even, at 70% you break even at about 1.43x. A 3x ROAS can be a triumph or a slow bleed depending entirely on that one input. Reach for ROAS at the campaign and creative level; reach for CAC when you are talking about the whole business.
Gotcha: ROAS counts revenue, not profit, and the platform grades its own homework. Meta and Google both claim conversions they only influenced, so the ROAS in the dashboard is usually higher than the ROAS in your bank account. Sanity check platform-reported numbers against total store revenue before you scale spend on them.
Ask AI for it
Build a ROAS dashboard card for a paid campaign. Show the headline ratio as a big number with an 'x' suffix, and directly under it a horizontal bar with a labeled breakeven marker computed from a contribution margin input (breakeven = 1 / contribution margin, where contribution margin is net of payment fees, fulfilment, and returns), printing the margin it assumed next to the marker. Fill the bar green past breakeven and red before it. Include a compact row of supporting figures: spend, attributed revenue, orders, average order value. Add a toggle to switch between platform-reported and blended (total revenue over total spend) so the gap between them is visible side by side.