ROAS Calculator
The ROAS calculator divides the revenue your ads brought in by what you spent on them. Add your profit margin and it also tells you the break-even ROAS, the number below which a campaign loses money even though it looks like it is working.
What ROAS is
Return on ad spend is revenue attributed to ads divided by ad cost. A ROAS of 4 means every $1 spent returned $4 in revenue. Unlike ROI it uses revenue, not profit, so a high ROAS does not guarantee a profit.
The formulas
ROAS = ad revenue ÷ ad spend
Break-even ROAS = 1 ÷ profit margin
Profit margin here means the share of revenue left after product and fulfilment costs but before ad spend. A 25% margin gives a break-even ROAS of 4.
Questions people ask
What is a good ROAS?
Four to one (4.0) is a common benchmark, but the right number depends on your margin. High-margin products can profit at 2.0; thin-margin products may need 6.0 or more.
Why is my ROAS high but I make no money?
Because ROAS ignores costs other than ads. Compare it to break-even ROAS for your margin.
ROAS versus ROI?
ROAS is a revenue ratio for ads only. ROI measures net profit on total investment.