Return on ad spend (ROAS) measures how much revenue an advertising campaign earns for every unit of currency spent. You calculate it by dividing ad-attributed revenue by ad cost, so a ROAS of 4 means four in revenue for every one spent. It is the standard yardstick for judging whether a paid channel, campaign, or ad set pays for itself.
How it works
The formula is simple: ROAS = ad-attributed revenue / ad cost. If you spend 2,000 on a campaign and it drives 8,000 in tracked sales, your ROAS is 4 (often written as 4x or 400%). “Attributed” is the load-bearing word. The number depends entirely on your attribution window and model, so the same campaign can show very different ROAS depending on how you count conversions.
Why it matters
ROAS tells you which channels to scale and which to cut. But it measures revenue, not profit. A 3x ROAS can still lose money once you account for cost of goods, shipping, and fees, which is why many teams also track break-even ROAS and profit-based metrics like POAS (profit on ad spend).
B2B quoting on Shopify
For B2B, standard ROAS often understates paid performance. A click may not convert into a checkout the same day; it becomes a quote request, then a negotiated order that closes weeks later and repeats. If your attribution only credits immediate store purchases, quote-driven revenue goes uncounted. Tracking a request through to an accepted, paid quote gives a truer denominator, since the closed order is the real return. Compare that revenue against ad and tooling costs, including your app plan, to see the full picture.
Example
Spend 1,000 on ads, generate 12 quote requests, close 3 orders worth 6,000 total. ROAS is 6x on realized revenue, even though a same-session purchase model would have reported close to zero.