Ads
Today, DataGlass is going to walk Shopee, Lazada, and TikTok Shop sellers through one of the most important numbers to watch when you run ads. That number is ROAS.
What is ROAS?
ROAS stands for Return on Ad Spend — in plain terms, "the return you get back from your ad spend." Put simply: after you run an ad, how many baht of sales did you get back?
The ROAS formula
ROAS = sales ÷ ad spend
Example: spend THB 1 on ads and get THB 20 of sales back → ROAS = 20.What does a high ROAS mean?
Generally, ROAS is a metric that tells you how well your ads are working. The higher the ROAS, the more sales each baht of ad spend brings back.
For example, a ROAS of 20 means THB 1 of ad spend returns about THB 20 of sales. But a ROAS of 5 means THB 1 of ad spend returns about THB 5 of sales.
The same THB 1 of ad spend returns four times as much at a ROAS of 20 as at a ROAS of 5.
So ROAS is a number every seller should know when running ads — because if your ROAS is too low, it may mean the ads aren't generating enough sales to justify the money you are paying.
But a high ROAS doesn't always mean more sales
This is where many people get it wrong. A high ROAS means "a high return per THB 1 of ad spend" — but it does not always mean your total sales are the highest.
For example:
| Shop A | Shop B | |
|---|---|---|
| Ad spend | THB 100 | THB 10,000 |
| Sales | THB 5,000 | THB 200,000 |
| ROAS | 50 | 20 |
You can see that Shop A has the higher ROAS — but Shop B has far more total sales.
Shop A wins on ROAS (50 vs 20), but Shop B's total sales are 40× larger. ROAS measures efficiency per baht, not scale.
So ROAS isn't only about "are sales high?" — it is about "how worthwhile is each baht of ad spend at turning into sales?"
A high ROAS means a high return per ad baht — not the highest total sales.
So should you just raise your ad budget to sell more?
Not necessarily. Many people see an ad with a good ROAS and rush to pour in more budget right away. But the truth is that adding budget without looking at the whole picture can make your profit disappear — because there are three things to watch out for.
ROAS is an average
When you scale up ad spend, the system usually has to expand to find new groups of customers — and those new groups may not buy as well as your original audience, which can drag your ROAS down.
The platform needs time to learn
Shopee, Lazada, and TikTok Shop don't adjust perfectly right away. If you suddenly raise your budget too aggressively, the system may spend the early period learning — and if you don't control it well, you can burn money before you see real results.
The ROAS the platform shows is sales, not real profit
This one is very important, because the sales you see have not yet had your shop's real costs subtracted — for example:
- Cost of goods
- GP / platform fees
- Payment fees
- Coupons / discounts / promotions
- Shipping / packing costs
- Returns / damaged goods
- Ad cost
So the ROAS the platform shows may look good, but once you subtract all of these costs, the real profit left may be very small — and sometimes you may even be losing money.
What you should really watch is ROAS after costs
Online sellers shouldn't look at ROAS alone. They should go one step further and ask: "At this ROAS, is there any profit left?"
Because different products earn different profit. A high-margin product can tolerate a lower ROAS, while a low-margin product needs a much higher ROAS to still make a profit.
In short
ROAS is a very important number when running ads — but ROAS is not the whole answer.
- A high ROAS = the ads are efficient relative to the money spent
- But it doesn't mean the highest total sales
- And it doesn't always mean the highest real profit
What sellers should really watch is this: sales have grown — but has real profit grown too?