What are ROI and ROAS?

A worked example

A campaign cost $5,000 and brought $20,000 of revenue. The products sold have a 40% gross margin.

• ROAS = 20,000 ÷ 5,000 = 4× (or 400%).
• Gross profit = 20,000 × 0.4 = $8,000. ROI = (8,000 − 5,000) ÷ 5,000 = 60%.

A 4× ROAS sounds very good, but with a 20% margin the same campaign would lose money: profit 4,000 − 5,000 = −$1,000.

Break-even ROAS

The ROAS at which a campaign stops losing money is 1 ÷ gross margin. At a 40% margin, break-even ROAS is 2.5×; at 25%, it is 4×. Knowing this number per product line turns ROAS from a vanity metric into a decision rule.

Two caveats: ROAS usually ignores repeat purchases, so channels that bring loyal customers are undervalued; and it depends on attribution — a channel's ROAS under last touch can differ widely from first touch.

ROI and ROAS in TapCub

The channel ROI report puts imported spend next to the sessions, new users, conversions and revenue your analytics already records. It shows spend, CPC, CPA and ROAS (revenue ÷ spend) by channel, source or campaign, and a quadrant chart with volume on one axis, conversion rate on the other and revenue as bubble size. You can switch credit between last session, first touch, last non-direct and linear.

Spend can be imported from CSV, added by hand or synced from connected ad platforms (synced rows replace manual ones for the same day), and is converted to the base currency at each day's rate. App installs from AppsFlyer, Adjust or Branch postbacks appear in the same report.

Common mistakes

• Treating ROAS as profit. Always compare with break-even ROAS.
• Trusting each platform's ROAS. Platforms overlap and each claims credit; compare in one place with one model.
• Judging on the first order. For repeat-purchase businesses, a channel with lower ROAS today can have higher lifetime return.

Related guides: Marketing KPIs and Acquisition Metrics.