Measuring ROAS: Best Practices & Tools

Return on Ad Spend (ROAS) is one of the most critical metrics for evaluating advertising effectiveness. Yet, accurately measuring ROAS—especially in mobile advertising—presents unique challenges. This guide provides a comprehensive framework for measuring, analyzing, and optimizing your ROAS.

What is ROAS?

ROAS (Return on Ad Spend) measures the revenue generated for every dollar spent on advertising. The formula is simple:

For example, if you spend $10,000 on ads and generate $50,000 in revenue, your ROAS is 5:1 (or 500%).

ROAS vs. ROI

While often used interchangeably, ROAS and ROI are different:

• ROAS measures gross revenue relative to ad spend only
• ROI measures profit relative to total investment (including product costs, overhead, etc.)

Why ROAS Matters

ROAS helps you:

1. Evaluate Campaign Efficiency: Determine which campaigns, channels, or creatives perform best
2. Allocate Budget: Move spend toward highest-performing areas
3. Set Targets: Establish benchmarks for campaign performance
4. Justify Spend: Demonstrate advertising value to stakeholders
5. Optimize in Real-Time: Make data-driven decisions quickly

Industry Benchmarks

What's a "good" ROAS varies by industry, business model, and margins:

Industry	Average ROAS	Good ROAS
E-commerce (General)	4:1	5:1+
Gaming (F2P)	2:1	3:1+
Subscription Apps	3:1	4:1+
Fintech	5:1	7:1+
Travel	6:1	8:1+
Retail	4:1	6:1+

Types of ROAS Measurement

1. In-Session ROAS

Revenue generated immediately during the same session as the ad click. Useful for direct response campaigns with instant conversions.

2. Day X ROAS

Cumulative revenue by specific days after acquisition:

• D0 ROAS: Same-day revenue
• D7 ROAS: First week revenue
• D30 ROAS: First month revenue
• D90/D180/D365: Longer-term measurement

3. Predicted ROAS (pROAS)

Machine learning models that predict future revenue based on early user signals. Critical for making optimization decisions before full cohort data matures.

4. Blended ROAS

Overall ROAS across all marketing channels, including organic. Useful for understanding total marketing efficiency.

Challenges in Mobile ROAS Measurement

Attribution Complexity

• Cross-Device Journeys: Users may see ads on one device and convert on another
• Post-IDFA World: Limited tracking on iOS requires new measurement approaches
• View-Through Attribution: Deciding how to credit impressions vs. clicks
• Multi-Touch Attribution: Multiple touchpoints before conversion

Revenue Tracking

• In-App Purchases: Must integrate with app stores and payment processors
• Subscription Revenue: Need to track LTV, not just initial purchase
• Ad Revenue: For apps monetizing with ads, include ad revenue in ROAS

Setting Up ROAS Measurement

Step 1: Define Your Revenue Events

Identify all revenue sources:

• In-app purchases
• Subscription payments
• Ad revenue (if applicable)
• Offline/post-install purchases

Step 2: Implement Proper Tracking

Use a Mobile Measurement Partner (MMP) and integrate:

• SDK integration in your app
• Revenue event tracking with accurate values
• Server-to-server integration for subscription apps
• Ad revenue tracking from mediation platforms

Step 3: Configure Attribution Windows

Set appropriate lookback windows based on your business:

Attribution Type	Recommended Window
Click-through	7-30 days
View-through	1-7 days
Engagement	1-3 days

Step 4: Set Up Reporting

Create dashboards that show:

• ROAS by campaign, ad set, and creative
• ROAS by channel and partner
• ROAS cohorts over time (D0, D7, D30, etc.)
• Geographic ROAS breakdown
• Device and OS ROAS comparison

Essential Tools for ROAS Measurement

Mobile Measurement Partners (MMPs)

• AppsFlyer: Comprehensive attribution and ROAS reporting
• Adjust: Strong fraud prevention with accurate measurement
• Branch: Deep linking with cross-platform attribution
• Singular: Marketing analytics with cost aggregation

Analytics Platforms

• Google Analytics 4: Free cross-platform analytics
• Amplitude: Product analytics with revenue tracking
• Mixpanel: User-level event tracking

Business Intelligence

• Tableau: Advanced visualization
• Looker: Data modeling and exploration
• Mode: SQL-based analysis

Optimizing for ROAS

1. Segment Your Data

Analyze ROAS across dimensions:

• By campaign and creative
• By geographic region
• By device type and OS
• By time of day/day of week
• By audience segment

2. Set Appropriate Targets

Establish ROAS targets based on:

• Your profit margins
• Customer lifetime value
• Business growth phase
• Channel benchmarks

3. Implement Bid Optimization

Use automated bidding strategies:

• Target ROAS bidding in platforms that support it
• Value-based optimization to acquire high-value users
• ML-powered bid adjustments based on predicted LTV

4. Test and Learn

Continuous improvement through:

• A/B testing creatives and messaging
• Testing new channels and partners
• Experimenting with audience segments
• Holdout groups for incrementality

Advanced ROAS Strategies

Incrementality Testing

Move beyond attributed ROAS to understand true incremental impact:

• Geographic holdout tests
• Channel on/off experiments
• Matched market studies

Marketing Mix Modeling

Understand the contribution of each channel in aggregate, accounting for factors like seasonality and external factors.

Unified Measurement

Combine attribution, incrementality, and MMM for a complete picture of marketing effectiveness.

Conclusion

Measuring ROAS accurately is essential for profitable growth. By implementing proper tracking, using the right tools, and continuously optimizing, you can maximize the return on your advertising investments. Remember that ROAS is just one metric—balance it with volume, LTV, and brand considerations for holistic marketing strategy.