Before you spend a single baht on ads, every business owner should know this number by heart. It is the compass that tells you whether the money you spend on ads each month is really worth it, rather than just looking at likes or engagement figures that look nice in a report.
- ROAS (Return on Ad Spend) = sales from ads ÷ ad spend. For example, spending ฿10,000 on ads and making ฿50,000 in sales gives a ROAS of 5x.
- A “good” ROAS has no fixed number. It must be higher than your break-even ROAS, which is calculated as selling price ÷ profit per order before ad costs.
- ROAS measures sales, not profit, so always read it alongside product cost, shipping and fees.
What is ROAS?
ROAS stands for Return on Ad Spend: the ratio between the sales you get back and the money you spend on advertising. For example, if you spend ฿10,000 on ads and generate ฿50,000 in sales, your ROAS is 5x, meaning every ฿1 spent on ads brings back ฿5 in sales.
Why high engagement isn't enough
Many businesses fall into the trap of looking only at likes, comments or reach, because these numbers look good in a report but don't tell you whether the business is actually making more profit. An ad that gets lots of likes but no purchases is a failed ad from a business perspective, however good the engagement numbers look.
High reach means the campaign has already succeeded.
What matters is how much of that reach turns into sales, and only ROAS tells you that.
What counts as a good ROAS?
There is no fixed number that works for every business, because it depends on your product's gross margin. A business with high profit per unit may be happy with a ROAS of 2–3x, while a business with low profit per unit may need 5–8x or more just to break even. The key is to calculate your own break-even ROAS first, then set a target above it.
A simple way to calculate break-even ROAS
- 1Find your product's gross margin. For example, if you sell at ฿100 and the cost is ฿60, your margin is 40%.
- 2Divide 100 by your margin figure (100 ÷ 40 = 2.5).
- 3That is your break-even ROAS: 2.5x. If your ads deliver a ROAS below this, you are losing money.
Summary
ROAS is the compass that tells you which ads to scale up, scale back or stop. Knowing this number from the start helps you make faster, more accurate decisions than looking at surface-level engagement.