MTTC Business management, Marketing, and Technology (098) Practice Test

Focusing on how effectively advertising dollars turn into revenue, ROAS measures the amount of revenue generated per unit of ad spend. It stands for Return on Ad Spend and is calculated by dividing the revenue attributed to ads by the amount spent on those ads. For example, spending $1,000 on a campaign that drives $5,000 in sales yields a ROAS of 5, or 500%, meaning five dollars in revenue for every one dollar spent. This helps compare campaigns and guide bidding and budget decisions. Remember that ROAS looks at revenue, not profit, so it doesn’t account for other costs like product, overhead, or non-ad expenses; for profitability you’d consider ROI or ROMI. Attribution choices also affect ROAS, since credit for sales may be allocated differently across channels or touchpoints.