Return on ad spend or ROAS is the amount of revenue that is earned for every dollar spent on a marketing campaign. It measures the effectiveness of that campaigns by calculating the revenue generated relative to the cost of the campaign.

The formula to calculate ROAS is: ‍

ROAS = Revenue generated from campaign / cost of the campaign

For example if an affiliate partners spent a total of $5,000 on a CPC campaign and it drives $50,000 in revenue, their ROAS is 10 or 10:1 ($50K revenue/$5K spent).

By understanding the factors that influence ROAS — like campaign goals, customer lifetime value and more — and using it in conjunction with other attribution metrics, businesses can optimize their marketing strategies and maximize their return on investment. ROAS can also help refine partnership efforts in order to identify the strongest revenue-driving strategies. Conversely, partnerships as a channel can help improve ROAS through co-marketing.