What Gross and Net Revenue Mean
Gross revenue is the total amount customers pay. Net revenue is what remains after you remove the amounts that were never really yours: refunds and chargebacks, taxes such as GST or VAT, and the commission taken by the app store or payment provider.
For return on ad spend, the choice sits in the numerator. The same spend and the same purchases can produce two quite different ROAS figures depending on which revenue number you divide by the spend.
Why the Basis Changes ROAS
Take a purchase of Rs1,000 sold through an app store. If the price includes 18 per cent GST and the store keeps 15 to 30 per cent as commission, the amount that reaches you is well under Rs800 before any refund. A dashboard that records the Rs1,000 purchase value reports gross revenue; a finance ledger reports something closer to the net figure.
Neither number is wrong. They answer different questions: gross revenue shows how much money moved through the app, and net revenue shows how much the business kept.
Where Each Basis Is Used
- Ad network dashboards. They report whatever value your purchase event carries, which is usually the gross price.
- Attribution and analytics tools. They record the revenue your app or backend sends. If the event carries the tax-inclusive price, the report is gross.
- Finance and board reporting. They normally use net revenue, after refunds, taxes and fees.
- Payback and profitability decisions. These should use net revenue, because only the money you keep pays back the ad spend.
How to Keep ROAS Comparable
- Decide the basis once: gross for in-channel optimisation, net for profitability.
- Check what each purchase event actually sends, including tax and currency.
- Send refunds back as negative revenue events where your tools support it, so reported revenue does not overstate what stayed paid.
- Compare channels only on the same basis and the same cohort age.
A consistent basis matters more than the choice itself. Mixed bases are the usual reason two reports of the same campaign disagree by a fixed percentage every week.