Marketing Glossary
Terms 5
Short definitions for the metrics around return on ad spend, each one linked to the calculator that works it out. More families follow.
- Break-Even ROASThe floor a campaign has to clearThe lowest ROAS at which a campaign still covers its product costs: 1 divided by your gross margin. At a 50% margin that is 2.00x.
- New Customer ROASncROASROAS counting only revenue from first-time buyers. It separates genuine acquisition from re-selling to people who already knew the brand.
- POASProfit on Ad SpendGross profit per unit of ad spend, as a multiple. Break-even sits at exactly 1, which is what makes it readable at a glance where ROAS is not.
- ROASReturn on Ad SpendRevenue per unit of ad spend. A ROAS of 3 means $3 back for every $1 in. It says nothing about profit until you put your margin next to it.
- ROMIReturn on Marketing InvestmentGross profit per unit of ad spend, as a percentage. Positive means the campaign earns after product costs; a strong ROAS can still sit below zero.
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