ROAS measures how much revenue each advertising dollar brings in, but not profit. A 4:1 ROAS sounds good, yet with a 20% margin it only breaks even. Compare your ROAS with the break-even ROAS for your margin.
How to use the ROAS Calculator – Return on Ad Spend
- Ad spend
- Revenue from ads
- Profit margin (before ad spend)
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the ad spend, the revenue attributed to the ads and your profit margin before ad costs.
Tips
- Use figures for the same period (a month, a quarter or a year) for every input so ratios compare like with like.
- Track the metric over time – the trend usually tells you more than a single value.
- Compare your result with industry benchmarks, which vary a lot between sectors.
- Treat the result as a starting point for a decision, then check the assumptions behind each input.
Common mistakes to avoid
- Mixing monthly and yearly numbers in the same calculation.
- Using revenue where the formula needs profit (or the other way round).
- Forgetting hidden costs such as taxes, fees, overheads or your own time.
Inputs explained
| Field | What to enter |
|---|---|
| Ad spend | Amount in your currency |
| Revenue from ads | Amount in your currency |
| Profit margin (before ad spend) | In % |
What each result means
- ROAS = [Revenue from ads]÷[Ad spend]
- ROAS as a percentage = [Revenue from ads]÷[Ad spend]×100
- ROI (on profit) = ([Revenue from ads]×[Profit margin (before ad spend)]÷100 – [Ad spend])÷[Ad spend]×100
- Break-even ROAS = 100÷[Profit margin (before ad spend)]
- Profit after ad spend = [Revenue from ads]×[Profit margin (before ad spend)]÷100 – [Ad spend]
Example values
How the main result changes when Ad spend changes and everything else stays at the example values above:
| Ad spend | ROAS (: 1) |
|---|---|
| 2,500 | 8.8 |
| 3,750 | 5.87 |
| 5,000 | 4.4 |
| 6,250 | 3.52 |
| 7,500 | 2.93 |
| 10,000 | 2.2 |
Formula
ROAS = ad revenue ÷ ad spendROI = (revenue × profit margin − ad spend) ÷ ad spendBreak-even ROAS = 1 ÷ profit marginWorked example
Inputs — Ad spend: $5,000; Revenue from ads: $22,000; Profit margin (before ad spend): 30 %.
Results — ROAS = 4.4 : 1; ROAS as a percentage = 440 %; ROI (on profit) = 32 %; Break-even ROAS = 3.33 : 1; Profit after ad spend = $1,600.00.
Frequently asked questions
What is a good ROAS?
Above your break-even ROAS; 4:1 is a common benchmark.
What is the difference between ROAS and ROI?
ROAS uses revenue; ROI uses profit after costs.
How do I find my break-even ROAS?
Divide 1 by your profit margin: 25% margin → 4:1.
What formula does the ROAS Calculator – Return on Ad Spend use?
ROAS = ad revenue ÷ ad spend.