Which statement about ROAS is correct?

• A. ROAS is revenue minus advertising spend.
• B. ROAS = revenue / advertising spend.
• C. ROAS = impressions / spend.
• D. ROAS = conversions / clicks.

Answer: (B)

ROAS measures how much revenue you earn for every dollar you spend on advertising. It is calculated by dividing revenue by advertising spend. That makes it a straightforward ratio of revenue to ad cost, showing the efficiency of the ad spend.

This is why the statement that ROAS equals revenue divided by advertising spend is the best choice. It directly captures the relationship ROAS is meant to express: how effectively your advertising budget translates into sales.

The other ideas don’t fit ROAS. Subtracting ad spend from revenue yields a net amount, not a ratio, and it ignores scaling and comparison across campaigns. Impressions divided by spend gives a reach or exposure metric, not revenue outcomes. Conversions divided by clicks is a conversion rate, which speaks to the quality of traffic, not the revenue generated from that traffic.