ROAS (Return on Ad Spend)

ROAS (Return on Ad Spend) measures the revenue generated for every unit of currency spent on paid marketing — metasearch bidding, PPC, or social ads. It's expressed as a ratio (or percentage) and is the metric marketers and revenue managers use to judge whether an ad channel or campaign is actually profitable, rather than just looking at clicks or bookings in isolation.

Formula

ROAS = Revenue Generated from Ads / Ad Spend

Example

A hotel spends €2,000 on Google Hotel Ads bidding for a given week and those clicks generate €16,000 in booked room revenue. ROAS is 8, often written as "8x" or "800%" — every €1 spent returned €8 in revenue.

Why it matters

ROAS is the counterpart to CPA and CPC: those measure cost per outcome, while ROAS measures the revenue return relative to spend, which is what actually determines whether a channel is worth funding. It's central to metasearch bid management, where hotels and OTAs alike set target ROAS thresholds and let automated bidding tools raise or lower CPC bids to hit them. A channel can have a low CPC and still be a poor investment if the resulting bookings carry a low ADR or high cancellation rate — ROAS captures that in a single number, which is why it's the metric usually reported to ownership rather than CPC or CTR alone.

Related

See [[CPA (Cost per Acquisition)]], [[CPC (Cost per Click)]], [[Google Hotel Ads]], and [[Attribution Window]] for the metrics ROAS is typically weighed against.