ROAS is the one number that tells you whether your advertising is an investment or a cost. Return on Ad Spend measures the revenue generated for every dollar of ad spend. Improving it is the most direct path to scaling profitably.
The Formula
ROAS = Revenue from Ads ÷ Ad Spend
If you spend $10,000 on ads and generate $40,000 in revenue, your ROAS is 4.0x (or 400%).
Why It Matters
ROAS is the primary metric for evaluating paid search profitability. It combines two levers: cost per click, which is driven by Quality Score, and conversion rate, which is driven by landing page quality. Improving either lever improves ROAS.
Good vs Bad ROAS
Industry benchmarks vary, but here are general guidelines:
- Below 2x: likely unprofitable after COGS and overhead
- 2-4x: break-even to moderately profitable
- 4-8x: healthy for most businesses
- Above 8x: strong and may indicate room to scale spend
How to Improve ROAS
- Reduce CPC through Quality Score. Every point of improvement lowers your cost per click.
- Improve conversion rates with better landing pages. More visitors convert from the same spend.
- Increase average order value through upsells, bundles, and premium positioning.
- Cut underperforming keywords and reallocate budget from low-ROAS terms to high-ROAS ones.
How Scanner Helps
Scanner directly measures the signals that drive both CPC (through Landing Page Experience and Quality Score) and conversion rate (through page speed, mobile usability, and content quality). Improving your Site Score improves both sides of the ROAS equation.