What is ROAS? And how do you calculate it correctly?
Short answer: ROAS stands for Return on Ad Spend: how many riyals of sales came back for every riyal you spent on ads. The math is simple: divide the sales revenue your ads drove by what the ads cost. Spend 10,000 SAR, get 35,000 SAR of ad-driven sales, and your ROAS is 3.5x; every riyal returned 3.5.
The calculation, step by step
ROAS = ad-driven sales revenue ÷ ad cost. Example: a Snap campaign cost 5,000 SAR this month and drove orders worth 12,500 SAR. ROAS = 12,500 ÷ 5,000 = 2.5x.
What counts as a good ROAS?
It depends on your margin. A practical rule for the Saudi market:
- Under 1.5x: usually losing money once product and operating costs are counted.
- 2x to 3x: break-even territory for most stores and restaurants; needs optimization.
- 3x and above: a winning campaign that deserves gradual budget increases.
A thin-margin restaurant needs a higher ROAS than a high-margin perfume store. Compute your own break-even first: divide 1 by your gross margin. At a 40% margin, your break-even is 2.5x.
The trap most advertisers fall into
Every platform computes ROAS for itself, from its own numbers, with overlapping attribution windows; you end up with three dashboards showing different figures whose sum exceeds your actual sales. The only honest number is the one computed from your real orders: store, POS, and delivery apps together. That is what we call true ROAS, and it is what MIQAS shows for every channel from one order source.
Common questions
What is the difference between ROAS and ROI? ROAS measures revenue against ad cost only; ROI measures net profit after all costs (product, delivery, commissions). A 4x ROAS campaign can still lose money on an ROI basis if margins are thin.
Do delivery-app orders count in ROAS? Yes, or you are underrating your campaigns; around 70% of restaurant revenue flows through delivery apps and never appears in platform dashboards. Without connecting those orders, your true return is higher than what you see.
How often should I review ROAS? A quick daily glance for the trend; budget decisions weekly. Daily decisions on volatile numbers do more harm than good.