What is ROAS?
Return on ad spend (ROAS) shows how much revenue a campaign brings in for every unit of currency you spend on ads. A ROAS of 4x means $4 in revenue for every $1 of ad spend.
ROAS only looks at revenue. To know whether a campaign is really profitable, compare it with your break-even ROAS, which depends on your profit margin.
How to use the ROAS calculator
- 1Enter your ad spend for the period you want to check, for example last month.
- 2Enter the revenue your ad platform or analytics attributes to those ads.
- 3Add your profit margin to see break-even ROAS and the profit left after ad costs.
Examples
Same formula, very different outcomes. The margin decides whether a ROAS is good.
| Scenario | Spend | Revenue | ROAS | Margin | Break-even | Verdict |
|---|---|---|---|---|---|---|
| Online shop | $1,000 | $5,000 | 5.00x | 30% | 3.33x | Profit |
| Lead generation | $2,000 | $3,000 | 1.50x | 50% | 2.00x | Loss |
| Low-margin product | $4,000 | $12,000 | 3.00x | 25% | 4.00x | Loss |
Frequently asked questions
What is a good ROAS?
There is no universal number. A good ROAS is one above your break-even ROAS. With a 25% margin you need at least 4x; with a 50% margin, 2x covers product costs.
What is the difference between ROAS and ROI?
ROAS compares revenue with ad spend only. ROI compares profit with your total investment, including product, staff and tool costs.
Should I include VAT or sales tax in revenue?
No. Use net revenue so your ROAS reflects money you actually keep.
How do I calculate break-even ROAS?
Divide 1 by your profit margin as a decimal. A 40% margin gives 1 ÷ 0.40 = 2.5x.
Is my data stored anywhere?
No. The calculation runs in your browser. Your numbers only end up in a link if you choose to copy one.