How it works
ROAS is measured on cohorts. Take the users attributed to a campaign in a given period, add up the revenue they have produced by a chosen day since install (day 7, day 30, day 90) and divide by the spend for that period. Revenue can include in-app purchases, subscriptions and advertising revenue. Because revenue keeps arriving, the ROAS of the same cohort rises over time, and teams follow it as a curve rather than a single figure.
Why it matters for an app team
ROAS connects acquisition to money. It shows which campaigns pay back and how fast, which is what decides where the next budget goes. Ad networks also use it as an optimisation target, bidding for users expected to reach a set return.
In practice
Example with made-up numbers: a campaign spends $2,000 on users who install in the first week of the month. By day 7 they have generated $600, a D7 ROAS of 30%. By day 30 the total is $1,500 (75%), and by day 90 it is $2,400 (120%). The campaign breaks even somewhere between day 30 and day 90.
Common confusion
ROAS is not ROI. ROI subtracts the cost first, so a 120% ROAS is a 20% ROI. Check whether revenue is gross or net of store commission and tax, since the difference is large. And compare campaigns at the same cohort age: a D7 figure for one against a D30 figure for another says nothing.