What is a Good ROAS for Digital Ad Campaigns?

How do you measure the success of your digital ad campaign? Through metrics, of course!

As you watch clicks and conversions roll in, one metric stands out from the rest: ROAS (Return on Ad Spend).

It’s the number that can make or break your budget decisions. A campaign with a high ROAS feels like striking gold, while a low ROAS raises tough questions: Is the targeting off? Is the product too costly to advertise? Or are we simply expecting the wrong benchmark?

Today, we’re breaking down what counts as a good ROAS, providing the important benchmarks to give you a framework to evaluate your own campaigns.

What is ROAS and Why Does It Matter?

ROAS is a simple but powerful metric that shows how much revenue you earn for every dollar spent on advertising.

The formula is straightforward:

ROAS = Revenue from Ads ÷ Advertising Spend

So, if you spend $1,000 on a Facebook campaign and generate $4,000 in revenue, your ROAS is 4:1 (or 400%).

Remember, ROAS is not the same as ROI (Return on Investment). As we’ve explained in more detail before, ROI looks at overall profitability, ROAS focuses only on the efficiency of your ad spend.

Marketers use ROAS because it provides a direct, campaign-level benchmark for performance. It helps you quickly identify which ads are pulling their weight and which are wasting budget.

By comparing ROAS across different platforms or campaigns, advertisers can make smarter decisions to optimize overall return.

What is a Good ROAS Percentage?

So, what exactly is a “good” ROAS?

As a general rule of thumb, many marketers aim for at least a 4:1 ratio (400%), meaning every $1 spent on ads generates $4 in revenue. At this level, most businesses can cover ad costs and still have room for profit after accounting for other expenses.

But there’s a catch…a “good” ROAS can look different depending on your business model, profit margins, and campaign goals.

Here’s a closer look at what we mean.

Industry-Specific ROAS Benchmarks

Ecommerce: What is a good ROAS for ecommerce? Typically, these brands see a 3:1 ratio as a healthy target. But this can shift depending on the niche. Luxury goods may operate with lower ROAS due to higher margins, while fast-moving consumer goods may need higher efficiency.

B2B & SaaS: These businesses often have longer sales cycles and higher lifetime value. That means they can live with a lower initial ROAS (sometimes even below 2:1) because customer relationships pay off in the long term.

Retail vs. Services: Retail businesses with tighter margins usually need stronger ROAS to maintain profitability, while service-based companies often rely more on recurring revenue or upsells, allowing for more flexibility.

Platform-Specific ROAS Expectations

Facebook Ads: What is a good ROAS for Facebook ads? Many advertisers consider 2:1 to 4:1 to be a solid benchmark. Since Facebook focuses heavily on discovery and demand generation, results often improve after testing and optimization.

Google Ads: Good ROAS for Google Ads usually trends higher, especially for search campaigns, since users already show buying intent. Benchmarks often range from 4:1 to 8:1. Display and YouTube campaigns may deliver lower ROAS but help with brand awareness.

Of course, there are plenty of other platforms out there. TikTok Ads are still relatively new, but offer strong ROAS for brands targeting younger audiences. LinkedIn often delivers lower ROAS due to high CPCs, but it’s effective for B2B lead gen. That’s why it’s so important to know where your audience is.

Factors that Make or Break a Good ROAS

Remember, the above benchmarks are useful, but what qualifies as a “good” ROAS depends on your business model and campaign goals. Some of the individual factors that can affect this metric include:

• Profit Margins: High-margin products can thrive with lower ROAS, while low-margin industries require higher returns to stay profitable.
• Customer Lifetime Value: Brands with repeat buyers or subscription models can accept lower upfront ROAS, knowing long-term value offsets ad spend.
• Ad Placement & Targeting: Intent-driven placements (Google Search) often deliver higher ROAS than broad awareness campaigns on social media.
• Funnel Stage: Top-of-funnel campaigns typically have lower ROAS since they focus on awareness, while retargeting and bottom-funnel ads usually drive higher returns.

How to Improve and Protect ROAS

Improving your ROAS requires more than just making your ads better. After all, even the best strategy can be undermined by ad fraud. You also need to proactively protect your investment.

The real key to sustaining a good ROAS is twofold: optimize continuously and shield your campaigns from fraud. By pairing performance improvements with fraud prevention, you ensure every advertising dollar works harder.

Experience the power of Anura and discover just how much fraud you have with a free trial.