What is ROAS and how is it defined?

• A. Return on Ad Spend is the ratio of revenue generated to the amount spent on advertising
• B. A metric for inventory turnover
• C. A content engagement metric
• D. A cost-per-click metric

Answer: (A)

ROAS measures how effectively advertising spend translates into revenue. It’s defined as revenue generated from ads divided by the amount spent on those ads. In formula form: ROAS = revenue from ads / ad spend. It’s usually shown as a multiple (for example, 4x means four dollars of revenue for every one dollar spent on ads). This helps you compare campaigns and decide where to allocate budget.

The other options describe different concepts: inventory turnover relates to how quickly stock sells, content engagement tracks how users interact with content, and cost-per-click is a cost metric for each click rather than the overall revenue generated per ad dollar.