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Return on Ad Spend (ROAS) is a marketing metric that measures the revenue generated from advertising campaigns relative to the amount spent on those campaigns. ROAS is typically calculated as a ratio of revenue to advertising spend, expressed as a percentage or a multiple.
For example, if an ad campaign generated $10,000 in revenue and cost $2,000 to run, the ROAS would be calculated as follows:
ROAS = ($10,000 revenue / $2,000 ad spend) = 5
In this example, the ROAS is 5, indicating that the campaign generated $5 in revenue for every $1 spent on advertising.
ROAS is an important metric for marketers as it provides insights into the effectiveness and efficiency of their advertising campaigns. A higher ROAS generally indicates that a campaign is generating more revenue for every dollar spent, while a lower ROAS may suggest that a campaign needs to be revised or optimized to improve its performance.
Customer Lifetime Value (CLV) represents the total funds a consumer spends at a business for products and services without any specific time measurements restricting the data.
Stock Keeping Units, or SKUs, are alphanumeric codes that retailers assign to track products. The information helps them identify specific inventory items, measure sales, and promote more efficient shopping experiences.
Free cash flow (FCF) is a measure of a company's financial performance that represents the amount of cash generated by the business after accounting for capital expenditures required to maintain or expand its operations.
