ROAS Calculator
Return on ad spend is revenue divided by ad spend. A ROAS of 4 means you made four dollars back for every dollar spent. Enter your numbers below — and add your margin to see whether that is actually profitable.
Your numbers
Result
Fill in the fields to see your result.
Formula
ROAS = Revenue from ads ÷ Ad spend
Worked example
$12,000 revenue on $3,000 spend is a ROAS of 4.0 (400%). At a 40% margin you keep $4,800, minus the $3,000 spent — $1,800 of real gross profit.
What's a good number?
The honest answer is that ROAS alone cannot tell you. A 4x ROAS is excellent at a 70% margin and loses money at a 20% margin. Calculate your break-even ROAS first — 1 divided by your gross margin — and judge everything against that. A business keeping 25% of revenue needs a ROAS above 4.0 simply to avoid losing money, while one keeping 80% breaks even at 1.25.
Questions
- Is ROAS the same as ROI?
- No. ROAS compares revenue to ad spend only. ROI compares profit to total cost, including the product, fulfilment and overhead. ROAS always looks better than ROI, which is why it is the number agencies prefer to report.
- What ROAS should I target?
- Start from your break-even ROAS and add the profit you need. Chasing a very high target ROAS usually shrinks volume — bidding systems achieve it by only buying the cheapest, easiest conversions and ignoring everything else.
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