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How to increase ROAS: 4 ways to optimize your ad spend today
Learn how to increase ROAS with smart strategies and tools to optimize your ad spend and drive more revenue
Updated on November 17, 2025
Table of contents
- Definition: What is ROAS in digital marketing?
- What is “breakeven” ROAS?
- How to calculate ROAS as a percentage
- How to increase ROAS in your ad campaigns
Definition: What is ROAS in digital marketing?
ROAS, or Return on Ad Spend, is a simple metric that indicates how well your digital ads are working. It measures how much revenue you’re pulling in for every dollar you spend on advertising.
Formula: ROAS = Revenue generated from ads / Cost of the ads
What is “breakeven” ROAS?
Breakeven ROAS refers to the point where the revenue generated from your ad campaign equals the cost of running the ads. You can calculate breakeven ROAS using this formula:
Formula: Breakeven ROAS = 1 / Profit Margin
How to calculate ROAS as a percentage
Formula: ROAS % = (Revenue from Ads / Cost of Ads) x 100
| Example 1: eCommerce store | Example 2: SaaS company |
|---|---|
| An online store has spent $2,000 on SEM ads this month and generated $10,000 in sales. ROAS = ($10,000 / $2,000) x 100 = 500%. |
A SaaS business has spent $5,000 on social media ads that brought in $12,000 in subscriptions. ROAS = ($12,000 / $5,000) x 100 = 240%. |
How to increase ROAS in your ad campaigns
- Fine-tune your audience targeting: Segment your audience by purchase history, demographics, or interests to show them more relevant ads.
- Ad spend optimization: Pause underperforming ads, use smart bidding strategies, and make use of ad scheduling.
- Take another look at your landing pages: Keep content relevant and engaging, test different headlines or calls to action, and ensure fast load times.
- Don’t ignore Customer Lifetime Value (CLV): Understand long-term customer value and adjust your acquisition spend accordingly.
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Implement these strategies today to maximize your advertising spend.