What Is ROAS? How to Calculate It (With Examples in EGP)

ROAS is the number most business owners hear first when they start running ads, and the one most often misread. A campaign can show a “good” ROAS and still lose money, and a campaign with a modest ROAS can be the most profitable thing you run. This guide explains what ROAS means, how to calculate it, and how to decide what ROAS your business actually needs.

What is ROAS?

ROAS (Return on Ad Spend) measures how much revenue you earn for every pound you spend on advertising.

ROAS = Revenue from ads ÷ Ad spend

If you spend EGP 10,000 on Meta ads in a month and those ads bring in EGP 40,000 in sales, your ROAS is 4. People write this as 4, 4x or 400%. They all mean the same thing: every EGP 1 spent on ads returned EGP 4 in revenue.

A worked example

Imagine an online clothing store in Cairo running ads for a month:

Item	Amount
Ad spend	EGP 15,000
Orders from ads	60
Average order value	EGP 1,000
Revenue from ads	EGP 60,000
ROAS	60,000 ÷ 15,000 = 4

A ROAS of 4 looks healthy. Whether it actually is depends on the next section.

ROAS is not profit

ROAS uses revenue, not profit. Revenue still has to pay for the product, shipping, packaging, payment fees, returns and your team. That is why two stores with the same ROAS can have completely different results.

Take the store above. If each EGP 1,000 order costs EGP 550 to produce and deliver, the 60 orders cost EGP 33,000. Add the EGP 15,000 ad spend and total costs are EGP 48,000 against EGP 60,000 in revenue: a profit of EGP 12,000.

Now imagine the same ROAS for a store whose products cost EGP 800 per order to make and ship. The 60 orders cost EGP 48,000, plus EGP 15,000 in ads, which totals EGP 63,000 against EGP 60,000 in revenue. Same ROAS of 4, but a loss of EGP 3,000.

How to find your break-even ROAS

Your break-even ROAS is the point where ads stop losing money. You only need your profit margin before ad spend, meaning what is left from each sale after product, shipping and fees.

Break-even ROAS = 1 ÷ Profit margin

• Margin of 50% → break-even ROAS of 1 ÷ 0.50 = 2
• Margin of 30% → break-even ROAS of 1 ÷ 0.30 = 3.3
• Margin of 20% → break-even ROAS of 1 ÷ 0.20 = 5

Anything above your break-even ROAS is profit from ads. Anything below is a loss, unless you are deliberately paying to win customers who will buy again later.

There is no universal “good ROAS”. A brand with 60% margins can grow profitably at a ROAS of 2, while a reseller on 15% margins needs nearly 7 just to break even. Work out your own number before judging any campaign.

ROAS vs ROI

The two are often confused:

• ROAS compares revenue to ad spend only. It tells you how efficiently your ads generate sales.
• ROI compares profit to total investment, including product cost, team and tools. It tells you whether the business is making money.

Use ROAS to compare and optimize campaigns, and ROI to decide whether advertising is worth it overall.

What about businesses that sell on WhatsApp?

Many brands in Egypt don’t sell through a checkout. Customers message on WhatsApp or Messenger, ask questions and buy later, so Ads Manager can’t see the revenue and can’t report a real ROAS.

In that case, track the steps you can measure and connect them to sales yourself:

1. Cost per conversation: ad spend ÷ new messaging conversations (Ads Manager reports this).
2. Conversation-to-sale rate: how many conversations turn into orders. Your sales team or a simple sheet can track this.
3. Average order value.

Then estimated ROAS = (conversations × conversion rate × average order value) ÷ ad spend. For example, 500 conversations at EGP 6 each (EGP 3,000 spend), with 10% buying at EGP 900, gives EGP 45,000 in revenue and a ROAS of 15.

This is also why the cost per conversation alone can mislead you: cheap conversations from people who never buy are worse than slightly more expensive ones from serious buyers.

How to improve ROAS

• Fix tracking first. Install the Meta Pixel and Conversions API (or Google Tag Manager) so the platform knows who actually buys and can find more people like them.
• Raise average order value with bundles, minimum orders for free delivery or a related product at checkout. Higher order value lifts ROAS without touching ad costs.
• Refresh creatives regularly. When the same people see the same ad too often, costs rise. New angles, formats and hooks keep results stable.
• Match the offer to the audience. Retargeting people who already engaged usually returns more than cold audiences, so give each group its own message.
• Improve what happens after the click. A slow website or a WhatsApp reply that takes hours loses buyers you already paid to reach.
• Judge campaigns over enough time. A day or two of data is noise. Compare weeks, and give new campaigns time to exit the learning phase before deciding.

The short version

ROAS tells you how much revenue each pound of ad spend brings back. It becomes useful once you compare it to your own break-even ROAS, which comes from your profit margin. Know that number, track sales properly (including WhatsApp sales), and optimize toward profit rather than a ROAS figure on its own.

If you want a second pair of eyes on your numbers, Maven’s performance marketing team can review your campaigns and tracking with you.