Return on Ad Spend (ROAS)

ROAS is a simple ratio. What makes it hard is agreeing on the numerator: which revenue, attributed by which rule, within which window. The spend side is the easy part, and even there a full picture includes agency fees and tooling if the number is meant to guide a budget rather than flatter a campaign.

The ROAS calculator does the arithmetic and lets you compare the platform figure with the CRM figure side by side.

A ROAS of 4 sounds healthy until you ask what a euro of revenue is worth after the cost of delivering it. The break-even point is the ROAS at which the gross profit from the attributed revenue exactly covers the ad spend, and it follows directly from the gross margin.

• A retailer at 40% margin breaks even at 2.5x, so the 4x campaign is profitable and the 2x campaign, which looked fine, is not.
• A consultancy at 70% margin after delivery salaries breaks even at about 1.4x, which is why a service business can run campaigns a shop could not.
• Margin includes more than cost of goods: shipping, payment fees, sales commissions and returns all move the break-even point, and a target ROAS set without them is a target set too low.

Ask three sources for last quarter's ROAS and you will get three answers. Meta says 6x, Google says 5x, and revenue divided by total spend in the accounts says 3x. None of them is lying; they are measuring different things.

• Platform ROAS

  Revenue the platform's own tag or pixel recorded, credited to that platform's ads inside that platform's attribution window. Each platform counts alone, so two platforms can both claim the same sale, and a conversion the pixel never saw is missing entirely.

• CRM ROAS

  Revenue from deals actually won in the CRM, tied back to the campaign that produced the lead, with one attribution rule across every channel. It arrives weeks later, but it adds up to the revenue the business booked.

For lead generation the difference is even sharper. A form submit has no revenue, so platform ROAS for a lead campaign is either blank or built on a proxy value someone typed into the conversion settings. The real revenue exists only once the CRM marks the deal won, and only ad tracking that carries the click through to the CRM can put it next to the spend. The optimise on revenue use case shows what changes when the platforms are fed that number instead.

0:45

• Give each stage a valueA qualified lead, a booked meeting and a won deal are worth different amounts. Until the deal closes, a stage value based on your close rate is a better numerator than zero or a guess.
• Send the closed revenue backDeal values sent to Google and Meta as offline conversions turn platform ROAS from a proxy into something close to the CRM figure, and let the bidding optimise on it.
• Report CRM ROAS per campaignThe number the budget meeting needs is revenue won per campaign over spend per campaign, on one attribution rule, with the sales cycle taken into account.
• Keep MER as the guardrailTotal revenue over total marketing spend, the marketing efficiency ratio, catches what per-campaign ROAS double counts.

ROAS is only as good as its revenue figure. Know your break-even point from your margin, and treat the platform's figure as that platform's opinion of its own work. The ROAS a lead generation business should run on is closed revenue from the CRM over campaign spend, on one attribution rule, and the same closed revenue is what the ad platforms should be optimising towards. Prove marketing ROI is the use case built around exactly that report.