ROAS Calculator

Calculate your Return on Ad Spend (ROAS) with this easy-to-use online calculator.

What is ROAS?

ROAS means Return on Ad Spend. It shows how much revenue you earn for each dollar spent on ads. The metric fits eCommerce, SaaS, local services, and any paid campaign that drives sales.

Ask a simple question. Are your ads profitable? Yes or no.
Spend $500 on ads and generate $1500 in tracked sales. ROAS equals 3.0, or 300%. You earned three dollars for every dollar spent.

A higher ROAS signals strong performance. A lower ROAS points to waste. Teams watch ROAS to decide where to add budget and where to cut. The number does not stand alone, though. Your profit margin sets the bar you must clear. Businesses usually monitor their ROAS to decide where to allocate more funds or reduce the budget.

How to calculate Return on Ad Spend?

Calculating Return on Ad Spend is simple. Use this ROAS formula:

ROAS = Revenue from Ads ÷ Cost of Ads

This indicates the amount of money you receive from each $1 you invest. Suppose that you invest $250 in an advertising campaign and generate $1000 in sales. The quotient obtained from dividing $1000 by $250 gives your ROAS of 4.0.

It means you got $4 for each $1 you spent. To get a percentage, you can multiply this by 100 (in this case, 400%).

This figure allows you to make a quick decision, if your campaigns are performing well and if they are still worth it, if you need to make some changes, or if you should stop them.

You can track ROAS by account, campaign, ad set, ad, keyword, or audience. Daily tracking gives speed. Weekly tracking gives stability. Many teams do both.

Edge cases matter. Zero spend yields no valid result. Refunds reduce revenue, so recalculate ROAS after returns. Large discounts lower revenue, so expect a lower number.

Tip: Record the time window for revenue. A seven-day click window gives a faster read than a 30-day view, and the number will differ.

What is a good ROAS?

A “good” ROAS is a very broad term that is used to signify an acceptable or desirable return on advertising spend, and it is very dependent on various factors—the business model, profit margins, goals, and industry of your company.

A 2:1 ROAS (or 200%) might be just right for some businesses to cover their costs. On the other hand, those companies with margins that are particularly low would probably require a 4:1 or even 5:1 ROAS to continue to be profitable.

No single number fits every brand. The right target depends on your costs and your model. A store with thin margins needs a higher ROAS to stay above water. A subscription with strong lifetime value can accept a lower ROAS on day one and still win later.

Generally, this is a quick guide:

1:1 ROAS (100%). You’re losing money unless you have 100% profit margins (rare).
2:1 ROAS (200%). Might be break-even or slightly profitable.
3:1 ROAS (300%). Considered solid for most industries.
4:1 or higher (400%+). Strong profit for many consumer brands.

Tip: Always align your ROAS targets with your business costs and margins.

Turn margins into a target. Use this quick rule:

Minimum ROAS to break even = 1 ÷ Profit margin

Margin 50% → break-even ROAS = 1 ÷ 0.50 = 2.0.
Margin 30% → break-even ROAS = 1 ÷ 0.30 = 3.33.
Margin 25% → break-even ROAS = 1 ÷ 0.25 = 4.0.

So a brand at a 30% margin needs at least 3.33 just to avoid a loss. A brand at a 50% margin can live at 2.0. Targets above those lines create profit.

What is a ROAS calculator?

A ROAS calculator is an easy-to-use online tool that allows you to quickly find out your return on ad spend. It eliminates the manual work of dividing revenue by ad spend, as you only need to enter the numbers and the tool will give you the ROAS immediately.

This is very handy when you need to analyze several campaigns or carry out A/B tests. Not only does it reduce the possibility of mistakes, but it also saves your time. No matter if you are a marketer, a small business owner, or an advertiser who manages a lot of campaigns, a ROAS calculator can simplify the decision-making process greatly. It’s a clever method to remain data-driven and ensure your marketing work is turning into profits.

How to use the ROAS calculator?

Using the ROAS calculator is quick and easy. Just follow these steps:

Enter your ad spend: This is the amount you paid to run your ads.
Enter your revenue: This is the total sales generated from those ads.
Click Calculate: The tool will give you the ROAS instantly.

Example:

Ad Spend: $500
Revenue: $2000
ROAS = $2000 ÷ $500 = 4.0 (or 400%)

You earned four dollars for each dollar spent.

Run the same steps for each campaign and compare. Keep winners. Fix or stop the rest.

Benefits of using a ROAS calculator

Saves time. No spreadsheets or long formulas.
Reduces errors. Clean math on every run.
Guides budget moves. Scale winners, trim weak lines.
Sharpens reviews. Spot trends week over week.
Supports A/B tests. Compare two creatives in seconds.

Small teams gain the most. One page, two fields, clear action.

Break-even ROAS: formula and examples

Break-even ROAS tells you the point where revenue equals total direct costs. No profit, no loss. Hit that number and you are safe. Pass that number and you make money.

Formula

Break-even ROAS = 1 ÷ Profit margin

Define profit margin as:

(Revenue − COGS − shipping − platform fees − transaction fees) ÷ Revenue

Worked examples:

Example:

Average order value (AOV): $60
COGS: $24
Shipping and packaging: $6
Payment fees: $1.80
Profit margin: ($60 − $24 − $6 − $1.80) ÷ $60 = 0.47
Break-even ROAS = 1 ÷ 0.47 = 2.13

Another Example:

AOV: $120
COGS: $72
Shipping: $0 (free, built into price)
Fees: $3.60
Margin: ($120 − $72 − $0 − $3.60) ÷ $120 = 0.37
Break-even ROAS = 1 ÷ 0.37 = 2.70

You now have a bar to clear. Set goals a step above that bar to create profit.

Factors that influence your ROAS

Many inputs shape ROAS. Improve the inputs and the number rises. Here are the most common ones, with plain steps you can take.

Ad creative quality

Strong creative lifts click-through rate and conversion rate. Clear product shots, benefit-led headlines, and tight offers win. Clutter, vague claims, and weak calls to action lose.

Steps you can take:

Test at least three image styles per product.
Write five headlines per ad and rotate.
Use social proof near the call to action.
Refresh at set intervals so fatigue does not drag results.

Audience targeting

Good targeting puts your ad in front of buyers, not random viewers. Bad targeting wastes money.

Steps you can take:

Start with high-intent audiences.
Use lookalikes from recent buyers.
Exclude past purchasers if the item is a one-time need.
Split broad from narrow to compare.

Landing page experience

The page must load fast, read clear, and move the visitor to act. Speed and clarity drive conversion rate. Conversion rate drives ROAS.

Steps you can take:

Keep load time under two seconds on mobile.
Place the main value and price above the fold.
Use short bullets for benefits.
Add clear trust markers: reviews, returns, secure checkout.
Cut extra fields in the form.

Offer and pricing

Price moves revenue, but the value must match. Offers create urgency and raise take-rate. Mispriced goods hurt ROAS.

Steps you can take:

Test bundles to lift AOV.
Try tiered discounts for larger carts.
Use timed offers with clear end dates.
Track margin on each promo.

Product-market fit

A strong product with clear demand gets sales at lower cost. Weak fit drags ROAS no matter how hard you push.

Steps you can take:

Read customer feedback weekly.
Fix top three objections that block purchase.
Improve photos and sizing guides for apparel and gear.

Channel and format

Search clicks act different from social clicks. Video acts different from static images. Each mix yields a new ROAS pattern.

Steps you can take:

Separate search, shopping, and social in reports.
Compare ROAS by format: video, carousel, single image.
Move budget to the format with the best return at target scale.

Seasonality and timing

Demand swings across months, holidays, and pay cycles. ROAS moves with that curve.

Steps you can take:

Review last year’s calendar and note peaks.
Increase bids near high-intent dates.
Prepare creative and inventory ahead of peaks.

Tracking and attribution

Attribution rules change what gets counted. Short windows favor quick buys. Long windows include late buyers. The choice changes ROAS.

Steps you can take:

Pick a standard window and stick to it in core reports.
Compare platform numbers with an analytics tool.
Tag links so sources match across tools.

ROAS vs. ACoS

ROAS and ACoS are both indicators of ad performance, but they understand it from different angles.

ROAS (Return on Ad Spend):

Gives primary importance to what you get for every $1 spent.
Formula: Revenue ÷ Ad Spend
Example: $1000 revenue ÷ $250 ad spend = 4.0 ROAS

ACoS (Advertising Cost of Sales):

Focuses on what you have to pay to get $1 in sales.
Formula: Ad Spend ÷ Revenue
Example: $250 ad spend ÷ $1000 revenue = 25% ACoS

In simple words, a high ROAS is good. A low ACoS is also good. They’re just two ways of looking at the same campaign performance.

Free Tool: Amazon ACoS Calcualtor

FAQs

What is Ad Spend?

Ad spend is the total amount of money you use for a promotional or advertising initiative. It covers all payments made to carry out your advertisements—such as what you remunerate Google, Facebook, or any other advertising platform. Ad spend, however, does not cover other expenses like organic marketing or SEO. Keeping track of ad spend is crucial as it enables you to figure out ROAS, manage your budget, and see which campaigns perform better. Being aware of your expenses will help you make better business decisions and not waste money on poor-performing ads.

What is a 200% ROAS?

A 200% ROAS indicates that the money you received from sales was double the amount you used for advertising. If your budget was $100 and the revenue generated was $200, then your ROAS is 2.0 or 200%. This is, however, often referred to as a break-even point for several businesses, depending on their profit margins. If the cost of producing and delivering the product is 50%, then a 200% ROAS implies you have just covered your costs. So, any ROAS that is greater than this will be your profit. This information enables you to evaluate whether your campaign is really profitable or just breaking even.

How to Calculate Break-Even ROAS?

Break-even ROAS is the value at which your revenue equals your costs, with no profit or loss. To find it, apply this formula:

Break-even ROAS = 1 ÷ Profit Margin

Example:

Let's say your profit margin is 25% (which includes all the expenses like product costs, shipping, and fees). Then:

Break-even ROAS = 1 ÷ 0.25 = 4.0

Understanding your break-even ROAS not only aids you in formulating more reasonable advertising objectives, but also ensures you allocate your budget efficiently, avoid unprofitable campaigns, and set clear benchmarks for scaling your ads.

Free Tool: Break Even Calcualtor

Conclusion

ROAS is definitely the key metric for businesses involved in paid advertising. It shows whether your money spent on advertising is turning into sales or if you are just losing your budget.

A ROAS calculator allows you to easily evaluate the progress, take the right actions, and adjust your campaigns to continue growing. This saves time, increases accuracy, and gives you the assurance to invest wisely.

Tracking ROAS is necessary, whether you are at the initial stage or operating complicated campaigns. Grab our free ROAS calculator now to be in charge of your marketing outcomes.