Attribution
Return on ad spend
Also called ROAS.
Return on ad spend is credited revenue divided by media cost. A value of 4 means each dollar of ads is credited with four dollars of sales.
How it is measured
Divide revenue credited to the campaign by its spend over the same window. The result depends on the attribution rule and the lookback, so state both. Use revenue, or better margin, not orders.
Check that the revenue is net of returns and discounts. Platform-reported revenue often counts at checkout and ignores refunds.
Worked example
A pet-supply store spends $8,000 on shopping ads in a month. The ad platform reports $36,000 of revenue, a 4.5 ROAS. After refunds and a 52 percent product margin, the margin return is about 1.7.
At that level, the campaign covers its ad cost but not much more. The store shifts money from low-margin accessories to a high-margin range, and the next month it moves up to a margin return of 2.4.
How it differs
Return on ad spend divides revenue by cost. Cost per acquisition divides cost by conversions. ROAS ignores margin and order count; CPA ignores order value.
Common errors
Using gross revenue. Ignoring refunds. Comparing channels with different attribution. Setting one target for every product. Mixing platform and analytics revenue.
In practice
Compute a margin-based return in a spreadsheet for each campaign. Set targets by product margin. Compare the platform's figure with your own order data.