Definition
ROAS (Return on Ad Spend)
Revenue generated per dollar spent on ads; can look great while the business still loses money.
From the episode “Congrats on the Revenue, Sorry About Your Money”How founders on the podcast use it
Revenue generated per dollar spent on advertising. A 4x ROAS means every $1 in ads produced $4 in revenue. High ROAS does not indicate profitability if fixed and variable costs are out of line — it is a channel efficiency metric, not a business health metric.
Congrats on the Revenue. Sorry About Your Money.Revenue divided by ad spend. Useful, and easy to game, which is why Deliberate calls chasing it "ROAS theater."
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