ROAS Calculator
Calculate Return on Ad Spend (ROAS) for your advertising campaigns. Find out how much revenue each dollar of ad spend generates. Essential for Google Ads, Meta Ads, and all paid media. Free and private.
How ROAS Is Calculated
ROAS (Return on Ad Spend) measures the revenue generated for every dollar spent on advertising. It is the most important metric for evaluating paid advertising performance. A ROAS of 4:1 (or 400%) means you earn $4 in revenue for every $1 spent on ads.
ROAS Formula
ROAS = Revenue from Ads / Ad Spend
ROAS % = (Revenue / Ad Spend) × 100
Required Revenue = Target ROAS × Ad Spend
- Revenue = Total sales revenue attributed to advertising
- Ad Spend = Total cost of the advertising campaign
- ROAS of 1.0 = break-even (revenue equals ad cost)
Example Calculations
Example 1: E-commerce Google Ads
Ad spend: $2,500, Revenue: $10,000
- ROAS: $10,000 / $2,500 = 4.0x (400%)
Example 2: Meta/Facebook Ads
Ad spend: $800, Revenue: $2,400
- ROAS: $2,400 / $800 = 3.0x (300%)
What Is a Good ROAS?
A commonly cited benchmark is 4:1 ($4 revenue for every $1 spent). However, "good" ROAS varies significantly by industry, business model, and profit margins. E-commerce businesses with low margins may need 5:1 or higher. SaaS companies with high lifetime value may be profitable at 2:1. Brand awareness campaigns may accept 1:1 or less if the goal is reach rather than immediate revenue.
ROAS vs ROI
ROAS measures gross revenue relative to ad spend only. ROI measures net profit relative to total investment (including product costs, overhead, etc.). A campaign can have a high ROAS but low ROI if the product margins are thin. Always consider both metrics together.