Knowing your return on advertising spend or ROAS is key for running a successful business. Your ROAS is the revenue you generate from advertising relative to the money you spent on said advertising. You want this number to be high, because that means your ads are effective.
In other words, you’re earning more money from your advertising than you’re spending on it. But to be a truly useful metric, you need to consider your ROAS in a broader context that includes the overall effect of your campaigns on your business's bottom line.
Here, learn more about how to evaluate advertising spend, ROAS benchmarks that can help guide your analysis, and how to improve your score.
First, a quick refresher: The ROAS metric is a simple calculation that determines how much money you earn for every dollar you spend on advertising. This gives you a quick assessment of whether or not your advertising strategy is effective or if it’s time to make some changes. By measuring ROAS, you can make more informed decisions about how to allocate your ad spend and improve the performance of your campaigns.
Here’s how to calculate ROAS: Simply divide your ad revenue by your total advertising cost.
ROAS = (Revenue from Ads) / (Cost of Ads)
For example, if your Facebook advertising campaign generates $10,000 in revenue and the total cost of the campaign is $2,000, the ROAS would be 5. If your campaign generated $2,000 but it cost $10,000, your ROAS would be much lower, just 0.2. If you generate $2,000 on that same $2,000 campaign, you’re not making or losing any money—called your breakeven ROAS.
You can save a step by simply plugging your values into our ROAS calculator.
Determining what constitutes a "good" ROAS can be challenging, as it depends on a range of factors, including business objectives, context, profit margins, and benchmarks. In fact, here at Triple Whale, we believe this is no universal good ROAS. What makes for a healthy ROAS depends on a range of factors, including industry, business objectives, context, and benchmarks (more on those below).
Because of these challenges, there are often varying viewpoints on a good or even average ROAS ratio. Some marketers believe a 2:1 ratio is strong. Others push for a 4:1 return.
Google assumes the average ROAS for Google ads is 2:1, according to the company’s Economic Impact report. That means a Google Shopping ROAS higher than that average—like 4, 7, or 10—is considered good. (You can also establish a target ROAS with Google Ads, an Automated Smart Bidding strategy that optimizes your ad spend for your specific ROAS goal.)
What is a good ROAS on Amazon? The brand’s ROAS guide points to an average of about 2:1 and a “good” ROAS of 3 to 4.
In 2024, the median ROAS for brands advertising on Triple Whale was 2.04, with many brands experiencing higher or lower ratios depending on their industry and other factors.
Benchmarking against industry standards and competitors can help you determine what a good ROAS is for your industry. By comparing your ROAS to that of similar businesses, you can identify areas for improvement and adjust your campaigns accordingly.
In the following table, you can see ROAS benchmarks by industry for a number of different categories that we’ve compiled from data from the market research platform Varos.
In the following table, you can see ROAS benchmarks by industry for a number of different categories, based on the last 365 days (as of 04/16/2025) of sales data for brands on advertising on Triple Whale.
With those benchmarks in mind, you can work with your team to determine your own goal, based on the factors that affect your success, such as:
As you can see in the table above, the average ROAS varies by industry. If you sell children’s toys, a good ROAS for you may be higher than if you sold pet supplies.
Similarly, you can see that the average Google ROAS is higher in many industries compared to the average Facebook ROAS. You’ll need to tweak your definition of a healthy ROAS based on the channel you’re analyzing.
The relationship between ROAS and business objectives is critical for determining what constitutes a good ROAS. For example, if your primary goal is to generate brand awareness, you may be comfortable with a lower ROAS if the campaign is reaching a wide audience. On the other hand, if your primary goal is to generate revenue, you likely need to see a higher ROAS to achieve this objective.
You have to consider your target audience when you’re determining a good ROAS. If your audience is small, for example, your campaign may not generate as much revenue, which can lead to a lower ROAS.
Just like the size of your audience matters, so does your profit margin. If yours is on the smaller side, you’ll need a higher ROAS if you want to turn a profit on your ad spend. Higher profit margins give you some wiggle room to still make a profit with a lower ROAS.
The level of competition in a particular market can also affect ROAS. If many other businesses are advertising in the same market, it may be more difficult for you to generate revenue from your campaigns, which can lead to a lower ROAS. The ROAS that’s considered good in a highly competitive market may be different from the ROAS that’s considered good in a less competitive market.
Recessions and booms can affect your ROAS. During a recession, consumers may be more hesitant to spend money, which can lead to a lower ROAS. During a boom, consumers may be more willing to spend money, which can lead to a higher ROAS.
Keep in mind traditional ROAS metrics can sometimes be misleading. They only take into account the revenue generated by ad campaigns and not the overall effects of those campaigns on your business's bottom line. For example, a campaign that generates a high ROAS may still be costing you money if it isn’t driving repeat business or increasing customer lifetime value.
That’s why at Triple Whale we believe it’s crucial to consider your ROAS alongside several other key metrics, like AOV (average order value), and CAC (customer acquisition cost), as well as ROI. Comparing ROI vs. ROAS gives you a slightly different output, because ROI, or return on investment, is your total profit from all of your investments in your business, not just from ad spend.
Once you’ve used the factors above to determine what feels like a strong ROAS for you, you might realize it’s time to optimize. There are many ways to increase ROAS, many of which are simply good business strategies, such as improving customer retention and A/B testing your creative.
Logan Brown, Product Manager at Triple Whale, recommends looking up-funnel for opportunities to increase your benchmark ROAS.
“Start by analyzing your average position and impression share,” he said. “You can optimize this with bidding strategies as well as feed optimizations. Next, analyzing CTR (click-thru rate) and CPC (cost per click) will help you better understand how interested searchers are in your product for when an impression is actually served. Once you've gotten the impressions and the clicks, it's now up to your on-site strategy to do the closing.”
Here are a few other suggestions that can help improve your ROAS.
By testing and optimizing campaigns, you can identify what works best for your target audience and optimize your ad spend accordingly. This requires continuous experimentation to ensure your advertising dollars are being spent effectively. By analyzing campaign performance data, businesses can identify areas for improvement and adjust their campaigns accordingly.
Data analysis is also critical for improving ROAS. By analyzing campaign performance data, your brand can identify which campaigns are driving the most revenue and adjust your spending as needed.
Artificial intelligence allows you to collect and analyze even larger amounts of data, which in turn will enable you to make more informed decisions about your marketing investments.
Triple Whale’s ROAS Anomaly Agent can detect changes in performance and provide recommendations for how to get your ROAS back on track. Book a demo to see how this AI agent, along with many more, can improve operations across your entire brand!
A “good” ROAS depends on your brand and business model, as well as other external factors like economic conditions. You’ll want to determine your own healthy ROAS goal in the context of other measures of your success and tweak your marketing efforts in ways that improve your ROAS and your bottom line. Get started with Triple Whale’s free ROAS calculator, and find out how we can help you optimize your marketing efforts.
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