ROAS Calculator
Work out the return on ad spend for any campaign. Enter the revenue an ad generated and what you spent to see the ROAS as a clean ratio and percentage, plus the profit. Add your gross margin to see the break-even ROAS you actually need to stay profitable.
How to calculate ROAS
- Enter the revenue attributed to the campaign or ad.
- Enter the amount you spent on the ads.
- Read off the ROAS ratio, percentage and profit, and add your gross margin to see the break-even ROAS.
Examples
$5,000 revenue from $1,000 spend
revenue = 5000, adSpend = 1000
ROAS = 5:1 (500%), profit = 4000
Break-even ROAS at a 25% margin
revenue = 5000, adSpend = 1000, marginPct = 25
ROAS = 5:1, break-even ROAS = 4:1
Frequently asked questions
What is ROAS?
ROAS, or return on ad spend, is the revenue you earn for every unit of currency you spend on advertising. It is calculated as revenue divided by ad spend. A ROAS of 4 (often written 4:1 or 400%) means you made 4 dollars in revenue for every 1 dollar spent on ads.
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend only, so it measures the gross top-line return of a campaign. ROI (return on investment) compares profit to the total cost, including the product cost and other expenses, not just ads. ROI is always lower than ROAS once you account for the cost of what you sold.
What is break-even ROAS and how does margin affect it?
Break-even ROAS is the ROAS at which the gross profit from a campaign exactly covers the ad spend, so you neither make nor lose money. It is 1 divided by your gross margin. At a 25 percent margin you need a 4:1 ROAS to break even; at a 50 percent margin you only need 2:1. The thinner your margin, the higher the ROAS you must hit.
What is a good ROAS?
It depends on your margins, but a common rule of thumb is that a 4:1 ROAS (400%) is healthy for many ecommerce businesses. Higher-margin products can stay profitable at a lower ROAS, while thin-margin products may need 5:1 or more. Always compare your ROAS to your break-even ROAS rather than a fixed target.
Does ROAS account for product costs and other expenses?
No. ROAS only looks at revenue against ad spend. To know whether a campaign is truly profitable you need your gross margin, which is why this tool also shows the break-even ROAS. For full profitability you should also weigh shipping, fees and overhead.
Is my data sent anywhere?
No. The calculation runs entirely in your browser, so the revenue and spend figures you type never leave your device.
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