GuideThe numbers leadership asks about
ROAS
Definition
The revenue a platform attributes to its own ads, divided by the spend it recorded, over a window it chose. Every input is set by the party being graded.
How it’s calculated
Attributed revenue divided by spend. The attributed revenue is the platform’s claim about itself: its attribution model decides which sales count as its work, and its window sets how long they keep counting. Whether a view counts alongside a click is one more setting. Change any of these and the ROAS moves while the sales stay put. Held still, the ratio has one honest job: comparing campaigns inside the same account, over the same fixed window. What it cannot settle is whether the money should have been spent at all: the model credits every sale it can reach, including demand that existed before the ad ran. That question belongs to incrementality.
What to watch for
Break-even ROAS is one divided by gross margin: at a 40% margin it is 2.5, at 25% it is 4. Whether a reported 3 is good news turns on a figure the platform has never seen. Two platforms’ numbers cannot be ranked against each other until both report on the same window and the same view settings; until then the ranking is a ranking of settings. And the figure is an average over all spend in the period, while the decision in front of you concerns the next DKK 100,000, which the average does not describe.
The question you ask
“What is our break-even ROAS at our gross margin, and is this number above it?”