January 30, 2024

What is a Good ROAS?

Using ROAS to determine the profitability of an advertising campaign is critical to your business. It provides you with actionable data that can help you hone in on what campaigns are working, allowing you to optimize your ad spending and maximize the amount of revenue your ads generate.

ROAS is a ratio that shows you how much revenue your advertisement is generating for each dollar you spend on it. This number is used by brands and retailers to see whether their advertising efforts are profitable, with a good ROAS being around a 4:1 ratio. The number varies by industry, however, as profit margins can change the ideal ratio of revenue to ad cost for a brand or product.

The best way to calculate ROAS is by looking at the results of each campaign on your advertising dashboard. This can be found in your Seller Central account under Advertising > Campaign Manager. You will be able to see the ROAS for each individual campaign as well as your overall advertising performance in this dashboard.

The simplest way to increase your ROAS is to eliminate any under-performing campaigns and invest more money into the ones that are generating revenue for your business. You can also focus on improving the quality of your ad campaigns by optimizing the targeting and bidding methods of each ad type you have active. For example, if you have a pizza shop in Queens, NY, don’t limit yourself to bidding on “pizza shops.” Use a tool like Ubersuggest to research stats and find keywords that are relevant to your audience’s location.

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