Return on ad spend (ROAS) is the revenue generated for every dollar spent on advertising, calculated as ad-attributed revenue divided by ad spend. A 4:1 ROAS means four dollars of revenue for every dollar spent. It measures revenue efficiency, not profit.
ROAS vs CAC vs profit
ROAS is a revenue ratio, so it says nothing about profit. On a product with a 20% gross margin you need a 5:1 ROAS just to break even (1 ÷ gross margin), so a 4:1 ROAS that looks healthy is quietly losing money. That is why we never read ROAS on its own: we pair it with break-even ROAS and with CAC, which captures the full cost of winning the customer.
The B2B caveat
In B2B, the revenue from an ad often lands months later as a closed deal, long after the click. Judging campaigns on same-session ROAS punishes the channels that actually generate pipeline. For longer cycles we track pipeline ROAS instead, so spend is measured against the opportunity value it creates, not just instant revenue.