What is ROAS?
Return on Ad Spend (ROAS) is a marketing metric that measures the revenue generated for every dollar spent on advertising. It's the gold standard for measuring advertising effectiveness because it directly connects your marketing investment to revenue outcomes.
Unlike vanity metrics like impressions or clicks, ROAS tells you whether your advertising is actually profitable. A ROAS of 200% means you're generating $2 in revenue for every $1 spent on ads.
ROAS Formula
ROAS = ($35,000 ÷ $10,000) × 100% = 350%
This means for every $1 spent, you earned $3.50 in revenue.
ROAS vs ROI: What's the Difference?
While often confused, ROAS and ROI measure different things:
- ROAS measures revenue generated relative to ad spend only
- ROI measures profit after accounting for ALL costs (product, operations, salaries, etc.)
A 300% ROAS doesn't mean 300% profit—it means 3x revenue. Your actual profit depends on your margins and other costs.
ROAS Benchmarks by Industry
| Industry | Target ROAS (D30) | What "Good" Looks Like |
|---|---|---|
| Mobile Gaming (Casual) | 80-120% | Break-even by D30, profit by D90 |
| Mobile Gaming (Mid-Core) | 50-80% | Longer payback, higher lifetime value |
| E-commerce | 300-500% | Immediate or short-term profitability |
| Subscription Apps | 100-200% | Focus on first-month revenue |
| Fintech | 150-300% | Higher margins justify higher targets |
Understanding ROAS Timeframes
ROAS is typically measured at specific time intervals after user acquisition:
- D0/D1 ROAS: Revenue generated on install day (early monetization signal)
- D7 ROAS: First week performance, crucial for quick optimization
- D30 ROAS: Monthly performance, standard industry benchmark
- D90/D180 ROAS: Long-term value, important for subscription and gaming apps
Why Timeframe Matters
A campaign might show 50% ROAS at D7 but 200% ROAS at D90 as users continue to monetize. Understanding your app's revenue curve helps set realistic short-term targets based on long-term goals.
💡 Pro Tip: Predictive ROAS
Use early signals (D1-D3) to predict long-term ROAS. If you know D1 ROAS typically represents 10% of D90 ROAS, you can make optimization decisions much faster. ClicksFlyer's predictive analytics can help model these curves.
Improving Your ROAS
- Optimize targeting: Focus on high-value user segments that monetize well
- Improve creatives: Better ads attract higher-quality users
- Test channels: Different networks deliver different user quality
- Optimize LTV: Better onboarding and engagement increases revenue per user
- Reduce CPIs: Lower acquisition costs improve ROAS at the same revenue
Common ROAS Mistakes
- Measuring too early: D1 ROAS rarely reflects true campaign value
- Ignoring organic cannibalization: Some "acquired" users would have come anyway
- Not accounting for attribution windows: Different MMPs may show different numbers
- Comparing across categories: A gaming app and fintech app have very different benchmarks