Tool

ROAS Calculator

Calculate return on ad spend quickly and understand what the result means for campaign decisions.

What ROAS means

Return on ad spend is the simplest way to judge a paid campaign. It tells you how much revenue each dollar of ad spend generated. ROAS is a revenue metric — not a profit metric. To turn ROAS into profit, factor in gross margin.

Formula: ROAS = Revenue ÷ Ad spend

Result explanation

A ROAS of 1.0× means the campaign broke even on revenue but likely lost money once margin is included. Most SME campaigns should aim for 3-5× ROAS at minimum. Very high ROAS (10× or more) usually means spend is too low to test scale.

Worked example

Spend $3,000 on Google Ads and generate $12,000 of trackable revenue: ROAS = 12,000 ÷ 3,000 = 4.0×. At a 40% gross margin, profit ROAS = (12,000 × 40%) ÷ 3,000 = 1.6× — still profitable after cost of goods.

Common mistakes

• Comparing ROAS without margin — two campaigns at 4× can have very different profits if margins differ
• Mixing prospecting and retargeting into one ROAS number
• Attributing branded search to paid channels
• Forgetting to include creative and management costs

Frequently asked questions

Is ROAS the same as ROI?

No. ROAS uses revenue; ROI uses profit. ROAS is faster to measure but less complete.

What is a good ROAS?

Depends on margin. 3-5× is healthy for most SME campaigns. Below break-even ROAS (100 ÷ margin%) loses money.