Glossary

Return On Ad Spend – ROAS

ROAS Explained: What is ROAS and how to calculate it?

Return On Advertising Spend (ROAS) is a revenue-based metric used to calculate the efficiency and performance of digital advertising spend. ROAS is calculated by dividing the amount of revenue generated by an ad campaign with the amount spent on that ad campaign. Typically, for mobile user acquisition campaigns, that revenue is calculated by looking at either the in-app purchases made or ad revenue generated by a user acquired through an ad campaign. Positive ROAS that is in line with other app metrics like user retention and ad revenue indicates a healthy ad performance.

Engaging ad units such as playable ads and rewarded video ads can sometimes lead to better ROAS, since the users acquired through these ads have had a chance to test drive the app before installing, and therefore are more likely to stick around for the long-term, making in-app purchases and watching ads.

 

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