What does ROAS stand for and what does it measure?

• A. Revenue generated divided by total ad impressions.
• B. Conversions divided by cost per click.
• C. Cost per thousand impressions versus ad spend.
• D. Revenue generated from advertising divided by advertising spend.

Answer: (D)

ROAS stands for Return on Ad Spend and measures how much revenue is generated for every dollar spent on advertising. It’s calculated by dividing the revenue attributed to the ad campaign by the advertising spend. This tells you how efficiently your ad dollars are turning into revenue. A higher ROAS means more revenue per dollar spent, and it’s common to express it as a ratio (for example, 4:1) or a percentage (400%).

Why this is the best description: it directly captures the relationship between ad investment and the revenue it produces, which is exactly what ROAS is designed to show. Other options describe different metrics—revenue per impression, a form of conversion rate tied to CPC, or cost per thousand impressions (CPM)—and those do not reflect the revenue-to-spend relationship that ROAS measures.