return on ad spend

Definition

Revenue generated per dollar spent on advertising, the metric that determines whether your marketing team gets champagne or cardboard boxes. When ROAS exceeds 1, you're making money; below 1, you're funding a very expensive hobby.

Example Usage

We achieved a 4.2 ROAS last quarter, meaning every dollar spent returned $4.20, finally justifying our existence to the CFO.

Origin

Direct response marketing and e-commerce analytics terminology from the 1990s-2000s

Fun Fact

The average ROAS benchmark varies wildly by industry from 2:1 to 10:1, making it impossible to know if you're winning or losing without context.

Source: Digital advertising analytics and e-commerce measurement standards

Related Terms

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programmatic buying

Using automated technology and algorithms to purchase digital ad inventory in real-time, replacing human media buyers with machines that work faster and complain less. It's the robot apocalypse, but for ad placement.

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influencer marketing

Paying people with large social media followings to promote your product, operating on the principle that strangers trust other strangers more than they trust brands. It's word-of-mouth marketing for the selfie generation.

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SERP

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supply-side platform

Technology that enables publishers to automatically sell their ad inventory to the highest bidder across multiple demand sources. The yang to the demand-side platform's yin, or more accurately, the auctioneer to the DSP's buyer.

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shill

A person secretly paid to hype up a product while cosplaying as an unbiased enthusiast, essentially the original influencer before Instagram made it a legitimate career. They're the planted audience member at an auction driving up bids, or that 'random customer' in the infomercial who just can't believe how amazing this vegetable chopper is. The word itself has become the ultimate callout in online discourse for anyone suspected of suspiciously enthusiastic endorsement.

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lead magnet

A free resource or incentive offered to prospects in exchange for their contact information, typically email addresses. It's bribery, but the business development team prefers to call it 'value exchange.'

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