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Glossary · Unit Economics

Return on Ad Spend

Return on ad spend (ROAS) is the revenue generated divided by the ad spend that generated it. A 4x ROAS means every $1 spent on ads brought back $4 in revenue.

How do you calculate ROAS for a sales call funnel?

Divide the revenue your sales team closed from ad-sourced calls by the ad spend over the same period. For high-ticket offers, use the revenue in your CRM or bank account, not the conversion value Ads Manager reports, because the sale happens on a call, often days after the click.

What ROAS do high-ticket accounts get?

From the accounts behind my case studies:

Account Ad spend Revenue ROAS
Brand-new agency offer $35,076 $168,000 4.79x
PR firm, 63 days $47,627 $268,859 5.6x
Agency selling to ecommerce brands $59,100 $289,000 4.89x

What's the minimum ROAS that proves a funnel works?

About 2x on the first test. At $2,500 in spend, closing one $5,000 deal puts you at 2x, which tells you the funnel works and any remaining problem sits in your sales process, not your advertising. Close three or four and you're at roughly 6 to 7x.

Where ROAS misleads

For subscription businesses, first-month ROAS undercounts. A high-ticket SaaS I worked with added about $95,000 in monthly recurring revenue against $35,627 in ad spend: about 2.7x in month one, and that revenue repeats every month the customers stay. Judge recurring offers on lifetime value, not first payment.

FAQ

Is ROAS or cost per booked call the better metric?

Use both. Cost per booked call tells you early whether the ads work; ROAS tells you later whether the whole system makes money.

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