ROAS (Return on Ad Spend) measures how many dollars of order revenue you generate for every dollar spent on advertising.
Return on Ad Spend = Total Revenue ÷ Total Ad Spend
| Metric | Definition |
|---|
| Total Revenue | Complete order revenue including shipping and taxes |
| Total Ad Spend | Sum of advertising spend across all connected platforms |
| Metadata | |
|---|
| Type | Multiplier (e.g., 3.5×) |
| Data Source | Shopify |
| Aggregation | Ratio |
Example
Your store spent $25,000 on advertising last month and generated $87,500 in order revenue:
| Metric | Value |
|---|
| Total Revenue | $87,500 |
| Total Ad Spend | $25,000 |
| ROAS | 3.5× |
How It Works
ROAS divides your total Shopify order revenue by your total advertising spend. A ROAS of 3× means every advertising dollar returns $3 in revenue. This metric helps you evaluate whether your ad spend is profitable and compare efficiency across campaigns and time periods.
When to Use
| Scenario | Action |
|---|
| Evaluating ad efficiency | Compare ROAS against your break-even threshold |
| Setting budget targets | Use ROAS to determine sustainable spend levels |
| Campaign comparisons | Identify which campaigns deliver the best return |
| Profitability analysis | Combine with margin data to assess true ad profitability |
| Metric | Relationship |
|---|
| Total Revenue | Numerator — total order revenue |
| CAC | Cost per new customer acquired |
| New Customer ROAS | ROAS from first-time buyers only |
| MER | Inverse ratio — spend as percentage of revenue |
