GROAS

GROAS stands for gross return on advertising spend, a marketing metric used to evaluate the revenue generated by advertising campaigns relative to the amount spent on them. It is closely related to ROAS but uses gross revenue in the numerator, and in some definitions excludes certain net adjustments. Definitions of “gross” can vary, with some practitioners using gross revenue before refunds or discounts, and others applying a broader gross revenue figure that includes taxes or fees.

Calculation: GROAS = Gross Revenue attributed to campaigns ÷ Advertising Spend. If a campaign yields $50,000 in gross revenue and $5,000 in ad spend, the GROAS would be 10 (a 10:1 ratio). Some definitions differ on whether rebates and returns are included in gross revenue, or whether they are deducted before calculation.

Usage: GROAS is used to gauge the revenue-generating efficiency of advertising and to compare campaigns or channels. It is often presented alongside ROAS and net metrics to provide a broader view of performance. Because definitions of gross revenue differ, it is important to specify the attribution model and time window used.

Limitations: As a metric focused on revenue, GROAS does not reflect profit or all marketing costs beyond ad spend, such as creative production, platform fees, or logistics. It is also sensitive to attribution and seasonality and can be distorted by return rates or discounts. For this reason it is usually interpreted with other metrics like gross margin, customer lifetime value (CLV), and customer acquisition cost (CAC), and with a clearly defined calculation method.