Meta ads ROAS: what it is and how to calculate it

The formula, with an example

ROAS = revenue from ads ÷ ad spend

A campaign spends 2,500 in a month and brings in 9,000 in revenue: 9,000 ÷ 2,500 = 3.6. For every unit of currency spent, 3.6 came back as revenue. Meta uses the same logic for its ROAS goal: if a budget of $100 should produce around $110 in purchases, that is a 110% return, and you would set the ROAS goal to 1.100 (Meta Business Help).

ROAS only works over the same period and the same set of campaigns on both sides of the division. Revenue from all channels divided by Meta spend alone makes Meta look better than it is.

Which ROAS Meta shows

Ads Manager has more than one ROAS column:

• Purchase ROAS is based on purchase information from your connected Meta business tools and on shop sales on Meta's own surfaces, attributed to your ads (Meta Business Help).
• Website purchase ROAS uses the value of website purchase events that the Meta Pixel or the Conversions API recorded on your website and that were attributed to your ads (Meta Business Help).

For website purchases, the revenue side is the value your pixel or Conversions API records with the purchase event. Where events can't be counted directly because data is missing, Meta may use statistical modeling for some events and their values (Meta Business Help).

Why Meta's ROAS differs from your shop's

The spend is the same on both sides; the revenue isn't. Meta counts purchases within the attribution setting of the ad set, for example up to 7 days after a click or 1 day after someone saw the ad (Meta Business Help). Your shop counts the orders that came in, with refunds and cancellations. Time zone, the choice between conversion date and impression date, and currency or decimal errors in the purchase event add further differences (Meta Business Help).

Depending on your set-up, Meta's ROAS can be higher or lower than the one you calculate from shop orders. The guide on conversions not matching your shop goes through the causes and how to line both numbers up.

What a good ROAS is

There is no ROAS that is good for every business, because it depends on your margin. A more useful number is your break-even ROAS, the point where the gross profit from the revenue just covers the ad spend:

break-even ROAS = 1 ÷ gross margin

With a gross margin of 40%, that is 1 ÷ 0.4 = 2.5. Below 2.5, the ads cost more than the gross profit their sales bring in, even before shipping, returns and fixed costs. With a margin of 70%, the break-even ROAS is about 1.43. Two shops with the same ROAS of 3 can therefore be in very different positions.

ROAS and ROI are not the same

ROAS compares revenue with ad spend. ROI (return on investment) compares the profit that remains after product costs, ad spend and other costs with what you invested. A campaign with a ROAS of 3 can have a negative ROI if the products cost a lot to make and ship. Use ROAS to steer campaigns against each other and ROI to judge whether advertising pays off as a whole.

What a ROAS goal changes

In Meta, a ROAS goal is a goal-based bid strategy. It aims to keep your return on ad spend near an average amount over the course of the campaign while getting as much purchase value as possible. Adherence is not guaranteed, and Meta recommends 50 to 100 or more conversions a week for best performance (Meta Business Help).

Meta's guidance on setting it: use the lowest ROAS you can accept, rather than bidding low on audiences you think convert well. As a starting point, Meta suggests a goal 10 to 20% below your recent average ROAS, measured with your attribution window. Without history, run a campaign with the Highest value strategy first to get a baseline (Meta Business Help). Your break-even ROAS from above is a natural floor for that lowest acceptable value.

How aurexus helps

aurexus shows ROAS from both sides. Once Shopify or WooCommerce is connected, a switch flips purchases, revenue and ROAS between Meta's view and your shop's view, with orders matched to campaign and ad through their UTM parameters. The shop's revenue is the order total in your shop's currency, with refunds deducted, so the shop ROAS is based on revenue after refunds.

The shop comparison is a beta in the paid plans Pro and Agency. More on the page for online stores.

Frequently asked questions

What is ROAS in Meta ads?

Return on ad spend: the revenue attributed to your ads divided by what you spent. In Ads Manager, purchase ROAS is purchase conversion value divided by amount spent (Meta Business Help).

How do I calculate ROAS for Meta ads?

Divide the revenue from your Meta ads by your Meta ad spend for the same period. 9,000 in revenue from 2,500 in spend is a ROAS of 3.6. Decide first whether you use Meta's attributed revenue or the orders your shop matched to Meta.

What is a good ROAS for Meta ads?

One that is above your break-even ROAS, which is 1 divided by your gross margin. At a 40% margin that is 2.5; at a 70% margin about 1.43. A fixed benchmark that fits every business doesn't exist.

What is a ROAS goal in Meta ads?

A bid strategy that aims to keep your return on ad spend near a set average while maximizing purchase value. Meta doesn't guarantee the goal and recommends 50 to 100 or more conversions a week for it (Meta Business Help).

Why is Meta ROAS higher than my real ROAS?

Meta's revenue comes from purchases it attributes to your ads within the attribution setting, including purchases within a day after someone only saw an ad (Meta Business Help). Your shop may assign some of those orders to other channels, and refunds lower the shop's revenue. Depending on your set-up, Meta's ROAS can also be lower than the shop's.