How do you calculate ROAS and what data is required?

• A. ROAS = cost / revenue; requires click data
• B. ROAS = revenue from ads / cost of ads; requires conversion value data and cost
• C. ROAS = revenue / impressions; requires impression data
• D. ROAS = conversions / budget; requires conversion count and budget

Answer: (B)

ROAS measures how much revenue you earn for each dollar spent on ads. The right calculation is revenue from ads divided by cost of ads, and it relies on two data pieces: the value of conversions (conversion value or revenue tied to those conversions) and the ad spend (cost). This reflects profitability of the ad spend, not just activity like impressions or clicks.

Why the other options don’t fit: using cost divided by revenue would invert the metric and misrepresent profitability; it also mentions click data, which isn’t the revenue measure you need. Revenue divided by impressions would give revenue per impression, not ROAS, and would rely on impression data rather than actual ad spend. Conversions divided by budget uses raw counts and budget, not revenue, so it measures efficiency of converting traffic rather than financial return.