ROAS (Return on Ad Spend) measures how much revenue your advertising generates for every dollar spent. It is the inverse of ACOS, expressed as a multiplier rather than a percentage.
Formula: ROAS = Ad Revenue ÷ Ad Spend
Example: If you spend $200 on ads and generate $1,000 in ad-attributed sales, your ROAS is 5x (or 5:1 — every dollar spent returned five dollars in revenue).
ROAS vs. ACOS
ROAS and ACOS are mathematically the inverse of each other:
- ROAS 5 = ACOS 20% (1 ÷ 5 = 0.20)
- ROAS 4 = ACOS 25%
- ROAS 2 = ACOS 50%
Amazon's advertising console reports ACOS natively. ROAS is more commonly used in Google Ads and Meta Ads contexts, but many Amazon sellers prefer ROAS because it frames performance positively (higher is better) and integrates more naturally with multi-channel advertising dashboards.
What's a Good ROAS?
Like ACOS, a "good" ROAS depends on your margins:
- Break-even ROAS = 1 ÷ your profit margin. If you make 30% margin before ads, your break-even ROAS is 3.33x.
- Target ROAS should be above break-even to remain profitable.
- Launch-phase ROAS may intentionally be below break-even to build ranking and velocity on a new product.
ROAS in Google and Meta Ads
In Google Shopping and Meta advertising, ROAS is the primary efficiency metric. Target ROAS bidding strategies allow you to set a ROAS goal and let the platform's algorithm automatically adjust bids to try to hit it. This works well at scale (>50 conversions per week) but can underperform in lower-volume scenarios.