How to measure your mobile marketing ROAS: 3 approaches
Originally published September 2019. The three labels below are the original article’s planning framework. Since then, App Tracking Transparency has limited cross-company tracking on iOS; an attribution label is not proof that an ad caused a purchase.
The same $100 spend can show 100%, 150% or 125% return on ad spend (ROAS), depending on which revenue you count. Changing the calculation does not change cash or establish profit.
This builds on ROAS is in the eye of the ROAS-holder: fix the cohort, revenue definition and measurement window before comparing returns. For current measurement limits, see what ROAS means for mobile apps.
What was the strict approach?
Count only revenue attributed to paid installs, divided by ad spend.
The original illustration spends $100 and receives $100 from paid users plus $50 from organic users. Strict ROAS is $100 / $100 = 100%. Its budget plan sought to recover ad spend from paid users inside an assumed 365-day payback period. That was an illustrative horizon, not a recommendation for every app.
What was the liberal approach?
Count revenue from paid and organic users together: $150 / $100 = 150%.
This broader view can inform an affordability plan, but it includes organic revenue that might have arrived without the ads. It does not establish incremental advertising return, and the business has exactly the same cash as in the strict calculation.
What was the realistic approach?
Count paid revenue plus the organic revenue caused by paid activity. The original assumed each paid user brought 0.25 additional organic users. Assuming equal revenue per user over the same window, that adds $25 to the $100 paid revenue: $125 / $100 = 125%.
The organic contribution needs evidence beyond correlation. Paid-attributed revenue can also include purchases that would have happened without advertising.
| Original label | Revenue counted | Illustrative ROAS |
|---|---|---|
| Strict | Paid-attributed revenue | 100% |
| Realistic | Paid plus incremental organic revenue | 125% |
| Liberal | Paid plus all organic revenue | 150% |
Which should you use?
The historical article connected these lenses to conservative or aggressive growth plans. Keep the definition explicit, and audit the measurement. A higher reported ROAS alone does not justify more spend: margins, other costs, incremental returns and cash timing still determine what you can afford.
Frequently asked questions
Should organic revenue count toward ROAS? State the chosen definition. A blended view includes all organic revenue; an incrementality estimate needs evidence of what paid activity caused.
Is 100% ROAS profitable? It means the counted revenue equals ad spend. Other costs and the timing of receipts still matter.
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