ROAS Calculator
Calculate Return on Ad Spend, target revenue needed, or compare campaigns.
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What is ROAS?
ROAS (Return on Ad Spend) is the most important metric for measuring advertising effectiveness. It tells you how much revenue you earn for every dollar spent on ads. A 4:1 ROAS means you get $4 back for every $1 invested.
Our calculator offers 3 modes: calculate your current ROAS, find the revenue needed to hit a target ROAS, or compare multiple campaigns side-by-side to identify your best performers.
Whether you're running ads on Google, Facebook, Instagram, TikTok, or Amazon, tracking ROAS is essential for optimizing ad spend and maximizing profitability.
ROAS Calculator
Calculate ratio and percentage return on ad spend.
Target ROAS Mode
Find revenue needed to hit your target return.
Campaign Comparison
Compare up to 5 campaigns ranked by ROAS.
Industry Benchmarks
See average ROAS for Google, Facebook, Amazon.
ROAS Formulas
Revenue ÷ Ad Spend
Result: 4 = "4:1" or "4x"
(Revenue ÷ Ad Spend) × 100
Result: 400%
1 ÷ Profit Margin
25% margin = 4x break-even
Revenue - Ad Spend
Gross profit from ads
ROAS vs ROI: What's the Difference?
| Metric | Formula | Measures | Best For |
|---|---|---|---|
| ROAS | Revenue ÷ Ad Spend | Gross revenue return | Ad campaign efficiency |
| ROI | (Profit - Cost) ÷ Cost | Net profit return | Overall business profitability |
Key insight: A 4x ROAS doesn't guarantee profit. If your product margin is 20%, you need 5x ROAS just to break even after COGS.
How to Improve ROAS
Refine targeting to reach higher-intent audiences.
Improve ad creative to boost click-through rates.
Optimize landing pages for better conversions.
Use retargeting for warmer, cheaper audiences.
Increase AOV with upsells and bundles.
Kill underperformers and reallocate budget.
ROAS Limitations
Ignores COGS: High ROAS can still mean losses if margins are low.
Attribution issues: Last-click may undervalue awareness campaigns.
Short-term focus: Doesn't account for customer lifetime value.
Frequently Asked Questions
What is ROAS (Return on Ad Spend)?
ROAS measures revenue earned per dollar spent on advertising. Formula: Revenue from Ads ÷ Ad Spend. A 4:1 ROAS means you earn $4 for every $1 spent on ads. It's the key metric for evaluating ad campaign profitability.
What is a good ROAS?
A 4:1 (400%) ROAS is generally considered good, meaning $4 revenue per $1 spent. But it varies by industry: retail may need 4x+, SaaS with high LTV may accept 2x initially. The key is that ROAS exceeds your profit margins to remain profitable.
How do I calculate ROAS?
ROAS = Revenue from Ads ÷ Ad Spend. Example: $10,000 revenue from $2,500 ad spend. ROAS = 10,000 ÷ 2,500 = 4 (or 4:1 or 400%). This means you earn $4 for every $1 spent on advertising.
What is the difference between ROAS and ROI?
ROAS measures gross revenue vs ad spend only. ROI measures net profit including all costs (COGS, operations, etc.). ROAS tells you if ads are working; ROI tells you if your business is profitable. A 4x ROAS can still be unprofitable if product margins are low.
Why is my ROAS low?
Common causes: 1) Wrong audience targeting. 2) Poor ad creative. 3) Landing page not converting. 4) Too-broad keywords. 5) High competition driving up CPM. 6) Attribution issues. Review your funnel step by step and A/B test improvements.
How do I improve ROAS?
- Refine audience targeting. 2) Improve ad creative and copy. 3) Optimize landing pages for conversions. 4) Use retargeting for warm audiences. 5) Test different bid strategies. 6) Focus budget on best-performing campaigns. 7) Increase average order value.
What is Target ROAS bidding?
Target ROAS is an automated bid strategy in Google/Facebook Ads. You set a target return (e.g., 400%), and the algorithm adjusts bids to achieve it. It works best with sufficient conversion data (50+ conversions per month).
Is 2x ROAS profitable?
It depends on your profit margins. If product costs 50% of revenue (50% margin), 2x ROAS = break-even. You need >2x to profit. If margin is 70%, 2x ROAS = 40% profit. Calculate: Profit = (ROAS × Margin) - 1. Always factor in all costs.
Should I use ROAS or CPA for optimization?
Use CPA if you have fixed conversion values (leads, signups). Use ROAS if conversion values vary (e-commerce with different order sizes). ROAS is better for maximizing total revenue; CPA is better for maximizing volume at fixed cost.
What is break-even ROAS?
Break-even ROAS = 1 ÷ Profit Margin. If your margin is 25%, break-even ROAS = 1 ÷ 0.25 = 4x. If margin is 50%, break-even = 2x. Any ROAS above this number is profitable; below is a loss. Calculate yours before setting ad targets.