What is ROAS (return on ad spend) for contractors
What is ROAS? It's the money you make back for every dollar you spend on ads. Simple math: if you spend $1,000 on ads and make $5,000, your ROAS is 5x or 500%.
Updated August 2026 · By JR Grow
What is ROAS: the definition
What is ROAS? Return on ad spend is the total revenue generated from an ad campaign divided by the cost of that campaign. It tells you, in one number, whether your ad money is working or getting flushed.
Example: You run a Google Local Services ad for plumbing. You spend $2,000 in a month. Those ads bring in 8 jobs worth $16,000 total revenue. Your ROAS is 8x (or 800%). That's profitable. Another contractor spends $3,000 and gets $2,100 back. That's 0.7x. They're losing money.
Why ROAS matters for your contracting business
Most contractors don't track what is ROAS because they're too busy running jobs. But if you're paying for Google ads, Facebook ads, or any other platform, you need to know if that money comes back as jobs and profit.
Here's the hard truth: 67% of callers won't leave a voicemail and just call the next guy. If your ads bring in calls but you're not capturing them or converting them, your ROAS tanks. You're bleeding money and don't even know it. ROAS forces you to connect the dots between what you spend and what you actually earn.
A healthy ROAS for most trades is 3x to 5x. Anything below 2x is a red flag.
Simple ROAS example for roofing or HVAC
Scenario 1: A roofer runs Google ads.
- Spends $1,500 in September
- Gets 6 roof inspections from the ads
- Closes 2 jobs at $4,000 each = $8,000 revenue
- ROAS = 5.3x. That's money in the bank
Scenario 2: Same roofer, no system to capture missed calls.
- Same $1,500 spend
- Gets 6 calls but misses 4 of them (voicemail, no answer)
- Only closes 1 job = $4,000 revenue
- ROAS = 2.6x. Half the profit for the same spend
The difference? Missed-call text-back and a process to follow up. That's why contractors who implement JR Grow's missed-call SMS system typically recover up to 80% of lost jobs and see roughly 3.5x more calls after 90 days.
How to calculate ROAS for your ads
The formula is dead simple: (Total Revenue from Ads) ÷ (Total Ad Spend) = ROAS
If you're running Google Local Services ads or Facebook ads, the platform will calculate it for you in the dashboard. But you have to be honest about revenue. Count actual jobs booked and completed, not leads or quotes.
Track it monthly. If your ROAS dropped from 4x to 2x, something broke. Maybe your landing page got slower, your response time got worse, or your website isn't converting visitors into booked jobs. A fast mobile-first site that loads under 2 seconds will lift ROAS more than you'd expect. Most contractors' websites take 6-8 seconds to load.
When tracking ROAS doesn't matter (and when it does)
If you're not running paid ads, you don't have a ROAS to track. That's fine. But you still need to know if your marketing is working. Local SEO and Google Business Profile optimization have ROI, not ROAS, but the principle is the same: money in, jobs out.
If you run a single ad once every 2 months, ROAS is noise. Wait until you've spent at least $500-1,000 before you judge. Ad platforms need data to optimize.
If you ARE running ads consistently and your ROAS is below 2x, stop and fix it. Don't throw more money hoping it gets better. Either your ads are targeting the wrong people, your website can't convert, you're missing calls, or your follow-up is broken. Most blue-collar shops fix this with a proper system that includes capture, follow-up, and a site that sells. That's what JR Grow automates.
ROAS vs. ROI: what's the difference
People mix these up all the time. ROAS is revenue in vs. ad spend out. ROI is profit in vs. total investment out (ad spend plus labor, tools, whatever else you invested).
You might have a 5x ROAS but only a 2x ROI if your costs to deliver the job are high. That still matters. But ROAS is the faster number to watch week to week because it's just ads and incoming money.
For contractors, focus on ROAS first. If it's 3x or higher, then dig into ROI to make sure you're actually keeping profit.
Key terms
ROAS: Return on ad spend. The total revenue generated from an ad campaign divided by the cost of that campaign, expressed as a multiplier (e.g., 5x means you made 5 dollars for every 1 dollar spent).
Ad spend: The money you pay to run ads on Google, Facebook, or any other platform to get visibility and calls.
Conversion: When a person who sees your ad takes the action you want, usually calling your business or booking a job.
Local Services ads: Google's ads that appear at the top of search results for local trades like plumbing, roofing, and electrical. You pay per lead or per phone call, not per impression.
Straight from Google, worth reading in full: Tips to improve your local ranking on Google and Local Business structured data.
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Book a Free Strategy Call →Frequently asked questions
What is a good ROAS for a contracting business?
3x to 5x is healthy for most trades (roofing, plumbing, HVAC, electrical). That means for every dollar you spend on ads, you get 3 to 5 dollars back in revenue. Below 2x, you're losing money. Above 5x, you've found a goldmine and should scale it.
How do I improve my ROAS if it's low?
Check three things: (1) Are your ads reaching the right people in your service area? (2) Is your website fast and converting visitors into calls or quotes? (3) Are you capturing and following up on every lead, especially missed calls? A system that recovers 80% of missed calls alone can double your ROAS. Most contractors leak jobs at the phone, not the ad level.
Does ROAS include the cost of labor to complete the job?
No. ROAS is just revenue divided by ad spend. It doesn't include your labor, materials, equipment, overhead, or profit margin. That's why ROAS can look great (5x) but profit can be thin if your job costs are high. Always calculate your actual profit per job separately.
Can I track ROAS if I don't run paid ads?
No, not directly. ROAS only applies to paid ad campaigns. If you're relying on organic Google ranking, referrals, or word-of-mouth, you track return on investment (ROI) instead. But the idea is the same: what did you spend to get that customer, and how much did you make?
What platform is best to run ads if I want to track ROAS easily?
Google Local Services ads and Google Ads are easiest for contractors because they track phone calls automatically and show ROAS in the dashboard. Facebook ads work too but require a bit more setup to tie revenue back to spend. The platform doesn't matter as much as making sure you capture every call and close every lead you can.