The first part of understanding Return on Ad Spend is the difference between Revenue and Return.
Let's say you have a campaign with a $1,000 budget on Vantage. That means $870 of ad spend.
Assuming you get the average return, you'll have a 10X return on ad spend.
Here's how we calculate that.
Revenue = Gross sales that were attributed to the campaign
Return = Revenue minus ad spend
First we calculate the Return by subtracting Ad Spend from the revenue:
Return = Revenue - Ad Spend
Return = $9,570 - $870
Return = $8,700
Then to calculate the Return on Ad Spend we divide the Return by the Ad Spend:
Return on Ad Spend = Return / Ad Spend
Return on Ad Spend = $8,700 / $870
Return on Ad Spend = 10X
Calculating ROAS is essential to understanding the success of your social ad campaigns. Once ads are optimized you should always be getting more than you put in!