ROAS Meaning in Plain English
The formula is ROAS = Revenue attributed to advertising ÷ Advertising spend. A campaign that attributes $4,000 in revenue to $1,000 in ad spend has a ROAS of 4, often written as 4:1 or 400%.
ROAS focuses narrowly on advertising revenue and spend. ROI can use a broader definition of return and cost, including margins, labor, software, creative work, and other expenses.
Example
A 4:1 ROAS says the tracking system attributed four dollars of revenue for each ad dollar. It does not say the business kept four dollars of profit.
Why It Matters
ROAS helps compare paid campaigns, while ROI is better suited to the wider financial picture. Both depend on trustworthy conversion tracking and attribution.