Question

What ROAS do you consider good enough to say your marketing strategy and operations are successful?
Do you only factor in ad spend, or do you also include the time and cost of creatives, ad copy, website, etc?

Answer 1

"Good enough" ROAS isn't a fixed number; it depends entirely on your profit margins, Customer Lifetime Value (LTV), and industry. Calculate your breakeven ROAS first (e.g., if 25% profit margin, 4:1 ROAS is breakeven). A common healthy range is 3:1 to 5:1, but it must align with your specific business profitability.

For calculating ROAS:

• Basic ROAS: (Revenue / Ad Spend) - Use this for quick, platform-specific ad optimization.

• True ROAS / Marketing ROI: (Total Revenue / Total Marketing Investment) - YES, factor in all costs like creatives, agency fees, website, tech, etc. This is essential for understanding your overall marketing profitability and strategic success.