ROAS: what it is, how to calculate it and why it is not the same as ROI
FLYDE Glossary · November 9, 2026 · 4 min read
ROAS (return on ad spend) measures the revenue generated by each euro spent on advertising. It is calculated by dividing the revenue attributed to a campaign by what it cost. A ROAS of 4 means €4 of revenue for every €1 spent.
How to calculate ROAS
An example. You spend €5,000 on a campaign and €20,000 of sales are attributed to it. ROAS is 20,000 ÷ 5,000 = 4 (or 400%).
Calculate your ROAS
Break-even ROAS
A ROAS above 1 does not mean a campaign makes money: revenue still has to pay for the product. The minimum ROAS to avoid losing money depends on your margin:
With a 40% margin, you need a ROAS of at least 2.5 to cover the cost of the product and the advertising.
ROAS and ROI
| ROAS | ROI | |
|---|---|---|
| What it measures | Revenue per euro of advertising | Profit per euro invested |
| Formula | Revenue ÷ ad spend | (Profit − investment) ÷ investment |
| Use | Comparing campaigns and channels | Knowing whether the investment pays off |
Why platform-reported ROAS is often inflated
- Every platform claims the sale. If a customer saw an ad on two social networks and searched on Google, all three may count the same purchase.
- It counts sales that would have happened anyway, such as those from loyal customers who were going to buy regardless.
- It cannot see the physical store, so it both inflates some campaigns and ignores the in-store effect of others.
That is why, to decide where to invest, it is better to look at incremental ROAS: the revenue that only exists because of the campaign, measured with a control group on real sales.
ROAS in FLYDE
FLYDE calculates your campaigns' ROAS on real ecommerce, store and CRM sales, not on the conversions each platform reports. With the incrementality module you get each action's incremental ROAS, with its margin and confidence interval.
Frequently asked questions
What does ROAS stand for? Return on ad spend: the revenue generated by each euro spent on advertising.
What is a good ROAS? One above your break-even ROAS, which is 1 divided by your gross margin. With a 25% margin you need a ROAS of 4 just to break even; with 50%, a ROAS of 2.
What is the difference between ROAS and ROI? ROAS measures revenue per euro spent on advertising; ROI measures profit per euro invested, after costs. A high ROAS can come with a negative ROI if the margin is low.
What is incremental ROAS? ROAS calculated only with the revenue that would not have existed without the campaign, measured against a control group. It is usually well below the ROAS platforms report, and it is the one that should guide investment.