What is ROAS?
Return on ad spend: revenue from ads divided by what the ads cost, so $40,000 in sales on $10,000 of spend is a ROAS of 4. It ignores margins, so a healthy-looking ROAS can still lose money.
$4 sales ÷ $1 spend = ROAS 4
ROAS is calculated as…
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In real work
The CFO didn't ask how cheap the AI-made cutdowns were to produce; she asked for ROAS, and they returned $3.80 in sales for every dollar of media.
In the illustration
One dollar of ad spend drops onto the left pan, four dollars of sales stack on the right, the beam tips and the ratio dial points to 4.
Take last month's ad with the best ROAS and make two new cutdowns in your creative tool, keeping its hook and offer and changing only the opening shot.
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