Return On Ad Spend (ROAS)

What is Return On Ad Spend (ROAS)?

Return On Ad Spend (ROAS) is a metric used in advertising to measure the financial performance of a marketing campaign, specifically the revenue generated in relation to the amount spent on advertising. In the context of CTV (Connected TV) advertising, ROAS helps advertisers assess the effectiveness of their campaigns in terms of generating revenue.

How is ROAS calculated?

In CTV advertising, the “Revenue Generated from Ads” typically represents the total revenue generated from customer actions attributed to the CTV ad campaign. This can include sales, conversions, or other desired actions. The “Cost of Ads” refers to the total cost incurred by the advertiser for running the CTV ad campaign, including expenses such as ad placements and production costs.

A ROAS value greater than 1 indicates that the advertising campaign is generating more revenue than the cost of the ads, suggesting a positive return on investment. Conversely, a ROAS value less than 1 suggests that the campaign may not be achieving a positive return.

Why is ROAS important?

ROAS is a crucial metric for advertisers in evaluating the profitability and efficiency of their CTV advertising efforts, helping them make informed decisions about budget allocation, targeting strategies, and overall campaign optimization.