ROAS

How it works

The formula is revenue divided by ad spend. Say a campaign cost $1,000 and the users it brought have spent $1,500 so far: ROAS is 1.5, also written 150%.

For apps the figure always has an age attached. Users keep spending after they install, so the same campaign has a low ROAS in its first week and a higher one later. Day-7 ROAS counts revenue from each user's first seven days, day-30 ROAS their first thirty. Compare campaigns at the same age, or a new campaign will always look worse than an old one.

Two inputs have to be right. Spend comes from the ad platforms, by campaign. Revenue comes from purchase, subscription or ad revenue events carrying a value. If either is incomplete, the ratio is wrong in a way that is hard to spot.

When it matters

ROAS is the working number for any app that earns money soon after install, such as shopping apps and games. Teams set a target, for example a given ROAS by day 30, and move budget toward campaigns that reach it.

It has limits. ROAS uses revenue, so it ignores refunds, store fees, discounts and the cost of goods unless you subtract them yourself. A campaign can pass 100% ROAS and still lose money.

How it relates to attribution

ROAS per campaign exists only because attribution assigns each paying user to a campaign. The assignment depends on settings such as the lookback window, so two tools can report different ROAS for the same spend. The long-run version of the same idea is LTV compared with acquisition cost.