ROAS measures a specific ad campaign and how it has impacted revenue. TROAS looks at how ad campaigns affect total revenue (not just revenue from ads)
Return on Advertising Spend (ROAS) is a marketing metric that measures a specific ad campaign and how it has impacted revenue. Tracking ROAS can inform whether digital marketing campaigns are working effectively or if there is room for optimization.
What is ROAS?
ROAS is a metric that shows the effectiveness of an advertising campaign by measuring revenue against the ad spend. ROAS can apply to any number of measurements, such as an individual campaign run across a short period of time or an annual assessment of an advertising campaign.
The distinguishing feature of ROAS, in contrast to other measurements like ROI or ACOS, is that ROAS measures a specific campaign and how its flight has theoretically impacted revenue. Calculating your ROAS can help inform how effective a campaign is and whether or not it’s beneficial to continue it.
What is TROAS?
TROAS is a metric that shows the effectiveness of an advertising campaign by measuring total revenue against the ad spend.
How is ROAS and TROAS calculated?
ROAS = Ad Sales / Ad Spend
TROAS = Total Sales / Ad Spend
What is a successful ROAS?
There are a number of variables that can come into play when determining ROAS and its efficacy, making it difficult to say what a specific benchmark of success would be. However, if you look at the figures that are produced, brands want as high of a ratio as possible. A 2:1 ROAS ratio as an average estimate would mean a brand is making $2 to every $1 of ad spend, which is a bit over the current industry average.1 However, ideally, a brand would want their ROAS to be higher, closer to 3 or 4.