ROAS Calculator

Return on ad spend is revenue attributed to ads divided by what the ads cost: ROAS = ad revenue ÷ ad spend. With the defaults, $5,000 of revenue from $1,000 of spend is a ROAS of 5, which the second line writes as 5.00×: every dollar of ads brought back five dollars of sales.

Some platforms and reports write the same figure as a percentage. Multiply by 100: a ROAS of 5 is 500%. A ROAS below 1, such as $800 from $1,000 (0.80×), means the ads didn't even bring back their own cost in sales.

The third result is labelled Profit (rev − spend), and it is exactly that: revenue minus ad spend. It does not subtract the cost of the products, shipping, payment fees or anything else, so it is not your profit.

Take a ROAS of 2.4: $2,400 of revenue from $1,000 of ads. The calculator shows a $1,400 profit. If your gross margin is 40%, those sales only produced $960 of gross profit, and after the $1,000 of ads you lost $40. With the defaults and the same 40% margin, the $5,000 of revenue leaves $2,000 of gross profit, or $1,000 after ad spend, not the $4,000 shown.

To get the real figure, multiply the revenue by your gross margin and then subtract the spend.

The ROAS at which ads exactly pay for themselves in gross profit depends on your margin:

break-even ROAS = 1 ÷ gross margin

This is why a single ROAS target can't fit every business. A ROAS of 4 is comfortably profitable at a 60% margin and a loss at a 20% margin. Work out your own break-even figure, then decide how much above it you need to cover overheads and the profit you want.

For repeat-purchase businesses, the first order is often not the whole story. If customers keep buying, a campaign can run below break-even on first orders and still pay off, but only if you have the repeat data to show it.

ROAS is only as reliable as the revenue you attribute to the ads. Ad platforms count conversions by their own rules, such as the time window after a click or a view, and two platforms can each claim the same sale. Adding up the revenue each platform reports will often give more than your store actually took.

Use one source for the revenue, state the attribution window, and keep it the same when you compare campaigns or months. A blended figure, total revenue divided by total ad spend across all channels, avoids double counting and is a useful check on the per-platform numbers.