What is a good return on ad spend? A ROAS of around 4:1 — ₹4 in revenue for every ₹1 spent on ads — is a common benchmark for a healthy, profitable campaign. What is 'good' depends on your margins: low-margin businesses need a higher ROAS to profit, while high-margin ones can succeed with less.
Return on ad spend (ROAS) tells you how much revenue each rupee of advertising generates. It is the clearest signal of whether a campaign is paying for itself, but the right target depends entirely on your profit margins.
ROAS ranges
| ROAS | Rating | What it means |
|---|---|---|
| 4:1 and above | Strong | Comfortably profitable for most businesses. |
| 3:1–4:1 | Healthy | A widely used target for sustainable campaigns. |
| 2:1–3:1 | Marginal | Profitable only with healthy margins. |
| Below 2:1 | Weak | Often loss-making once costs are included. |
What affects your ROAS
- Profit margin — thin margins need a higher ROAS to profit
- Average order value — higher order values lift ROAS
- Targeting and relevance — better matches convert more
- Landing-page quality — clicks must turn into sales
- Customer lifetime value — repeat buyers justify a lower first-sale ROAS
How to improve it
- Set your ROAS target from your profit margin, not a generic number
- Improve landing pages to convert more of the clicks you pay for
- Cut spend on poorly converting keywords or audiences
- Factor in repeat purchases, not just the first sale
Work out your own numbers — the ROAS Calculator does it instantly, for free, with the formula and a worked example built in.
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