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ROAS vs ROI: Nail Your Ad Metrics with Full Force Ads

ROAS vs ROI: Don't Let the Math Mess With Your Margins

Newbie trap: Thinking ROAS = ROI. Nah—ROAS measures revenue efficiency (great for bragging rights), but ROI hits your actual profit after costs (the "am I rich yet?" test). Use both: ROAS to scale fast, ROI to sleep at night.

Metric Formula What It Tells You Example (AOV $50, COGS 30%, LTV 3x, Ad Spend $1K)
ROAS Revenue / Ad Spend How much sales per ad dollar (ignores costs) $6K revenue / $1K = 6x (looks baller!)
ROI (Profit / Ad Spend) x 100 % return after costs (the truth serum) ($3.5K profit / $1K) x 100 = 350% (solid, but watch margins)

Pro tip: Aim for 4-6x ROAS to hit 200%+ ROI in e-comm. Got questions? Hit us up—we build funnels that nail both.

Key Terms Explained

  • AOV (Average Order Value): The average amount a customer spends per purchase (e.g., $50).
  • COGS % (Cost of Goods Sold): The percentage of each sale that goes to product costs (e.g., 30% means $15 of a $50 order is cost).
  • LTV (Lifetime Value): The total revenue a customer generates over their entire relationship with your brand. We use a multiplier to estimate it simply: LTV = AOV × Multiplier. The multiplier is the average number of purchases per customer (e.g., 3x for one-time buy + two repeats).
  • Ad Spend: Your total monthly/period spend on ads (e.g., $1,000 on Meta/FB).

ROAS Calculator: Revenue Per Ad Dollar

Plug in your numbers—see how much sales you're getting per ad buck. (No costs here; that's ROI's job.)




ROI Calculator: Real Profit Return

Your true % return after costs. (ROAS ignores this—don't sleep on it.)





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