ROAS (Return on Ad Spend)
ROAS (Return on Ad Spend) is the ratio of revenue generated to advertising spend — typically calculated per channel and campaign — providing the channel-level performance metric that drives MCA paid-media allocation decisions.
Why This Matters
ROAS calculations in MCA differ from e-commerce because the funded-deal commission is the conversion event and the lead is the intermediate event. Channel-level ROAS measures revenue (commission) per dollar of channel spend. A Google Ads campaign spending $20K and generating 8 funded deals at $4,000 commission has ROAS of $32,000/$20,000 = 1.6x. ROAS targets vary by channel maturity: scaling channels may run at 1.5–2x while mature channels operate at 3–5x. ROAS analysis combined with CPFD tracking drives spend allocation across paid channels.
Frequently Asked Questions
Frequently Asked Questions
What ROAS should MCA paid channels target?
Mature optimized channels: 3–5x ROAS. New scaling channels: 1.5–2x ROAS acceptable during scaling. Below 1x sustained ROAS indicates channel exit. Above 5x ROAS suggests under-investment and opportunity to scale spend.
Should I track ROAS or CPFD?
Track both. ROAS is channel-comparison friendly (universal ratio). CPFD is operationally actionable (direct spend efficiency). Use ROAS for portfolio-level allocation and CPFD for channel-specific optimization.