The marketing metric Return On Ad Spend (ROAS) tells how much revenue the business makes for every rupee spent on marketing and advertising. The higher the ROAS, the better.

All answers out there for “What is a good ROAS for Facebook Ads?” are truly subjective.

As a Facebook marketing agency, our short answer would be that ROAS of a Facebook ad account should be in the range of 4:1 to 10:1 for Facebook Ads to be sustainable and profitable (400% – 1000% is considered to be a good ROAS percentage).

ROAS Formula

While calculating ROAS it is important that all revenue is attributed correctly and that all costs are taken into account. Costs like ad spend, agency fees, affiliate commissions, salaries. Only then ROAS will truly reflect advertising efficiency and help advertisers decide where to invest in advertising.

roas formula - how to calculate roas

If you invest in marketing/advertising, ignoring ROAS is a mistake.

via GIPHY

ROI VS ROAS

ROI takes into account all costs and represents overall efficiency and profitability of the business. ROAS is an indicator of efficiency of marketing and advertising. ROAS is a key performance indicator for advertisers often preferred over other important metrics like ROI, CTR, response rates, conversions, and CPA.

An ROAS of 5:1 (or 500%) means that the business generates 5 rupees for every 1 rupee invested in advertising.

Good luck to you with Facebook ads.

Published On: December 31st, 2020 / Categories: Facebook Ads /

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