Return on ad spend
Also called: ROAS
Return on ad spend (ROAS) is the revenue attributed to a campaign divided by what was spent on it, expressed as a ratio or multiple, and it is the most direct measure of whether advertising is paying for itself.
Return on ad spend in dealership marketing
Dealerships should calculate ROAS on gross margin rather than vehicle price, because a ROAS that looks healthy on a ₹10 lakh sale can be a loss once the thin margin on that sale is considered. Service and accessories revenue attributed to the same buyer belongs in the calculation too.
ROAS is only as good as attribution: if walk-in sales are not linked back to the campaign that caused them, digital ROAS will be understated and budget will be cut from channels that were working.
Related terms
- Leads & Sales
Cost per lead
Cost per lead (CPL) is the total marketing spend on a channel or campaign divided by the number of leads it produced, giving the average amount paid to generate one enquiry.
Read definition - Advertising
Conversion tracking
Conversion tracking is the setup that records when an ad click leads to a valuable action, such as an enquiry form, a WhatsApp click, or a phone call, so that campaigns can be optimised and judged on real outcomes instead of clicks.
Read definition - Leads & Sales
Lead attribution
Lead attribution is the practice of recording which marketing channel, campaign, or page brought in a lead, so that spend can be credited to the sources that actually produce buyers.
Read definition
Where it applies
AutoSutra services where return on ad spend comes into play.
Further reading
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