ROAS explained with a BHD example
ROAS (return on ad spend) tells you how much revenue your ads generate for every dinar you spend on them. The formula is revenue from ads ÷ ad spend. For example, if your ads bring in BHD 3,000 of sales and cost BHD 1,000, your ROAS is 3×, or BHD 3 for every BHD 1 spent. A high ROAS alone doesn't mean you're profitable. You also need to know your break-even ROAS.
The formula
ROAS = Revenue from ads ÷ Ad spend
| Revenue from ads | Ad spend | ROAS |
|---|---|---|
| BHD 3,000 | BHD 1,000 | 3.0× |
| BHD 1,500 | BHD 1,000 | 1.5× |
| BHD 800 | BHD 1,000 | 0.8× (losing money on media alone) |
All figures are illustrative.
Why ROAS isn't the same as profit
ROAS measures revenue, not profit. Your products or services also have costs: materials, staff, delivery and so on. You need to know how much of each dinar of revenue you actually keep.
How to find your break-even ROAS
Break-even ROAS = 1 ÷ Gross margin
Example: a clinic package sells for BHD 100, and the direct cost of delivering it is BHD 60.
- Gross margin = (100 − 60) ÷ 100 = 40%
- Break-even ROAS = 1 ÷ 0.40 = 2.5×
This means:
- ROAS below 2.5×: the ads cost more than the margin they generate.
- ROAS of 2.5×: you break even on the ad spend.
- ROAS above 2.5×: the ads contribute to profit.
Where the "revenue" number comes from
- Online sales: tracked through the Meta Pixel and Conversions API, or through Google Ads conversion tracking.
- Offline sales (such as real estate deals, clinic bookings and gym memberships): record in your CRM which leads came from which campaign, then add up the revenue those leads produced.
Without tracking, the ROAS shown in an ad platform may not match reality.
ROAS vs ROI
- ROAS looks only at ad spend.
- ROI includes all costs: media, creative production, agency fees, staff time and so on.
Use ROAS to compare campaigns, and ROI to judge the whole marketing investment.
How to improve ROAS
- Stop or reduce spend on ads that stay below break-even.
- Test new hooks and offers. Creative often has the biggest effect.
- Tighten targeting to people who can realistically buy.
- Improve the landing page or the follow-up process, so more leads become sales.
- Retarget people who already showed interest.
Frequently asked questions
What is a good ROAS?
Any ROAS comfortably above your own break-even point. Because margins differ, there is no universal "good" number.
Should I always chase the highest ROAS?
Not always. Very high ROAS on a tiny budget can mean you're missing volume. Balance ROAS against the total profit it produces.
Vexora Media plans paid campaigns around cost per qualified lead and ROAS, and reports results in plain language every month. Learn more →