ROAS (return on ad spend)

ROAS is the revenue an ad campaign brings in divided by what it cost, written as a multiple such as 3×.

Spend $500, attribute $1,500 of sales to it, and ROAS is 3×. It measures revenue, not profit, which is why a ROAS above 1× can still lose money.

The figure to compare against is break-even ROAS, which is one divided by your gross margin: at a 40% margin you need 2.5× just to cover the product and the ads.