What is ROAS? Definition, types and how to calculate it in e-commerce

What is ROAS used for in e-commerce?

ROAS is the main metric for measuring whether your paid ad campaigns are efficient. It tells you how much you sell for every peso you spend on ads. Without ROAS, ad decisions are pure gut feel.

With ROAS you can compare campaigns against each other, decide where to scale budget and where to cut, and know whether your Meta Ads or Google Ads spend is generating enough to justify itself.

The problem is that there are several types of ROAS, and the one Meta Ads shows you in the dashboard isn't the one you should use to make decisions. If you use Meta's number without adjusting it, you're probably overestimating how profitable your campaigns are.

What are the types of ROAS?

There are three versions of ROAS every e-commerce store should know. Each one measures something different and serves a different purpose:

The campaign ROAS you see in Meta Ads Manager is the most optimistic and the least reliable. Meta uses attribution windows of 7 days post-click and 1 day post-view, and it takes credit for sales that would have happened without the ad anyway. The result is that reported ROAS can be 30-50% higher than real ROAS.

How do you calculate ROAS?

For Blended ROAS (the most honest one, and the one we recommend for running the business): take your store's total revenue for a period and divide it by total ad spend over that same period. If you sold $500,000 and spent $100,000 across Meta, Google and Mercado Libre Ads, your Blended ROAS is 5.

For Real ROAS: compare the sales Meta claims it generated with the real sales that reached your store. If Meta reports $200,000 in attributed sales and your real orders were $130,000, there's $70,000 of over-attribution. Real ROAS is $130,000 ÷ $25,000 = 5.2 instead of the 8 Meta reports.

Learn to calculate Blended ROAS step by step in our guide: how to calculate your store's real Blended ROAS.

Does a high ROAS mean you're making money?

Not necessarily. A ROAS of 5 can mean you're making a lot, or that you're losing money on every sale. It depends on your margin.

ROAS only measures the ratio between sales and ad spend. It doesn't include product cost, the sales platform's fees, the cost of Mercado Pago interest-free installments, shipping costs or any other variable costs. All of those costs live inside every sale too.

That's why Break-Even ROAS exists: the minimum ROAS to avoid losing money. If your margin before ads is 40%, you need a ROAS of at least 2.5 so your ads don't cost you money. At a ROAS of 2 you're losing on every sale, even if Meta shows you green numbers.

Read the full guide: Break-Even ROAS with Mercado Pago and installments.

Why is Meta's ROAS different from real ROAS?

Meta Ads uses generous attribution models. With the 7-day post-click and 1-day post-view window, Meta can claim sales from customers who saw one of your ads 6 days ago and then bought through organic search, and Meta still counts that sale as its own.

The simplest test: compare the total sales Meta says it generated with the total orders that reached your store in the same period. If Meta claims more sales than you actually had, there's over-attribution.

This discrepancy doesn't mean your ads don't work. It means you need a more honest number to make decisions. Read the full analysis in Real ROAS in e-commerce with Meta Ads.

Escalafy calculates real ROAS automatically by comparing your store's real sales (from Tiendanube, Shopify or Mercado Libre) with your real Meta Ads spend, without relying on Meta's attribution model. Meta's ROAS and real ROAS show up side by side. That gap is your starting point. Learn more about how the Real ROAS module works.

What's a good ROAS for e-commerce in LATAM?

There's no universal "good ROAS." It depends entirely on your margin before ads. This table gives you a reference point:

A ROAS of 3 can be excellent if your margin is 50%. It can be a loss if your margin is 25%. The absolute number tells you nothing without the context of your cost structure.

ROAS FAQ

Are ROAS and ROI the same thing?

No. ROAS measures how many pesos in sales you generate for every peso of ad spend (sales ÷ ad spend). ROI (return on investment) measures net profit over the total invested: (profit − investment) ÷ investment. ROAS doesn't subtract product cost or other costs; ROI does.

What is MER (Marketing Efficiency Ratio)?

MER is another name for Blended ROAS: total store revenue divided by total ad spend. Same calculation, different name. Some outlets use it to set it apart from the campaign ROAS Meta reports. If someone talks to you about MER, they're talking about Blended ROAS.

When should you scale your ad budget?

Before scaling, check that your real ROAS (not Meta's) is above your Break-Even ROAS with enough room to spare. If your Break-Even ROAS is 2.5 and your real ROAS has been at 3.5 for 2 weeks, you can scale. If your real ROAS barely clears break-even, scaling raises the risk of going negative if ROAS dips a little.

How do Mercado Pago installments affect ROAS?

Interest-free installments raise the real cost of each sale (for example, 3 installments add 10.49% + VAT on the sale price). That lowers your margin before ads and raises your Break-Even ROAS. With lots of installment sales, the ROAS you need to be profitable can be much higher than what you calculate without that cost.

How does Escalafy calculate ROAS?

Escalafy imports real sales data from Tiendanube, Shopify or Mercado Libre and matches it against your real Meta Ads and Google Ads spend. It calculates three numbers: campaign ROAS (the one Meta reports), Blended ROAS (total store sales ÷ total ad spend) and real ROAS (real sales ÷ spend, without the over-attribution). All three in one dashboard. See the Escalafy Real ROAS module.