ROAS is an acronym that stands for "Return on Ad Spend".
It is kind of like ROI (Return on Investment).
Calculating ROAS is a piece of cake - the formula is:
(Revenue – Cost) / Cost
For example, if we spend $1 on advertising (cost) and generate $100 in sales (revenue), ROAS is 99x.
What is a healthy ROAS? I find anything higher than a 5x ROAS is worth pursuing. On the flip side, Frank Kern brags about generating 100x ROAS for his clients. In fact, he is so passionate about it, he inked it on his knuckles: