ROAS Calculator

What is ROAS?

Return on ad spend is the revenue a campaign produced for every unit of currency you put into it. A ROAS of 4× means 4 back for every 1 spent. It is the quickest way to compare campaigns, but on its own it says nothing about profit — that depends on your margin, which is why this calculator asks for it.

Formula

• ROAS = revenue ÷ ad spend
• ACoS = ad spend ÷ revenue × 100
• Break-even ROAS = 100 ÷ gross margin %
• Profit = revenue × margin % − ad spend

Worked example

A campaign spends 4,500 and brings in 18,000, a ROAS of 4× and an ACoS of 25%. At a 40% gross margin the goods leave 7,200, so after the ads you keep 2,700. Break-even at that margin is 2.5×, so this campaign is comfortably ahead.

How to use the ROAS calculator

1. Enter the revenue the platform attributes to the campaign, and the spend for the same window.
2. Enter your gross margin — selling price minus cost of goods, as a percentage. This is what turns ROAS into an answer about profit.
3. Compare against break-even ROAS. Anything below it is losing money even when the ROAS looks respectable.

Getting it right

• Use gross margin, not net. Rent and salaries do not change with one campaign, but the cost of the goods you sold does.
• Returns and refunds belong in the revenue figure. A 5× ROAS with a 20% return rate is really 4×.
• For subscriptions, compare lifetime value against spend instead — first-order ROAS will always look too low.

Frequently asked questions

How do you calculate ROAS?

Divide the revenue a campaign generated by what you spent on it. 18,000 of revenue from 4,500 of ads is a ROAS of 4×.

What is a good ROAS?

Any ROAS above your break-even point, which is 100 divided by your gross margin percentage. At a 40% margin you need 2.5× just to cover the cost of the goods and the ads.

What is the difference between ROAS and ACoS?

They are the same relationship upside down. ROAS is revenue ÷ spend; ACoS is spend ÷ revenue as a percentage. A 4× ROAS is a 25% ACoS.