Definition
ROAS, or Return on Ad Spend, is a marketing metric that measures the revenue generated for every dollar spent on advertising. A 4x ROAS means $4 in revenue for every $1 in ad spend. It's calculated by dividing total ad-driven revenue by total ad spend, giving businesses a direct measure of campaign profitability.
Why it matters for Detroit businesses
Detroit business owners don't need more impressions — they need to know if their ad budget is making money. House of Karma tracks ROAS on every Meta and Google campaign we manage, connecting ad spend directly to CRM-tracked revenue so you see exactly which campaigns are profitable and which are draining your budget.
A good ROAS depends on your profit margins and business model. Most businesses need a 3x to 4x ROAS to be profitable after accounting for product costs and overhead. House of Karma's managed campaigns average a 4.8x ROAS in the first 60 days, but the right benchmark depends on your specific margins.
ROAS measures revenue generated per dollar of ad spend — it looks only at ad costs versus ad-driven revenue. ROI (Return on Investment) is broader, factoring in all costs — product, overhead, labor — to determine overall profitability. ROAS is a marketing-specific metric; ROI is a business-level metric.
Understanding the terminology is step one. Let's build the systems behind it.