Return on ad spend, or ROAS, is the revenue generated for every pound or dollar spent on advertising, calculated by dividing total revenue attributable to advertising by total ad spend. A ROAS of 4 means that for every £1 spent on ads, £4 in revenue was generated. It is the primary efficiency metric for paid advertising channels and is used to evaluate whether a campaign or channel is generating profitable returns.

In B2B specifically, ROAS calculation is complicated by long sales cycles. The revenue from ads run today may not close for 90 to 180 days. This means ROAS measured at the campaign close date often under-reports performance because it misses deals still in progress. Using pipeline value as an interim proxy, discounted by your expected close rate, produces a more useful mid-cycle ROAS estimate.

ROAS benchmarks vary significantly by industry, deal size, and competitive intensity. High-ACV B2B businesses running LinkedIn Ads typically see lower ROAS than B2C e-commerce because each deal takes longer to close and involves more touchpoints. A ROAS of 2 to 4 over a full sales cycle may be acceptable for enterprise sales where each deal is worth significant ARR.

Paid terms matter because ad performance can look fine right up until budget is wasted. A clear definition helps the team separate creative problems from audience problems and measurement problems from offer problems. It usually becomes more useful when it is defined alongside CAC, Attribution, and CPL.