Financial Calculator

ROAS Calculator

Calculate your Return on Ad Spend and find out how much every $1 of ad spend earns back.

Ad Revenue Generated ($)

Ad Spend ($)

Cost of Goods Sold / COGS ($) (optional - for net profit)

Tips to improve your ROAS

Narrow your audience targeting - broader audiences waste spend on low-intent users; tighter lookalike or retargeting audiences convert far better.
Test your landing page as hard as your ads - a 10% increase in conversion rate has the same effect on ROAS as a 10% increase in ad revenue.
Run creative A/B tests continuously; ad fatigue sets in quickly and winning creatives from 3 months ago may now be dragging down your ROAS.
Review bid strategy by campaign goal - maximize conversions bidding often outperforms manual CPC once you have sufficient conversion data (50+ conversions).

What ROAS tells you - and what it doesn't

ROAS (Return on Ad Spend) is the most direct measure of advertising efficiency: for every dollar spent on ads, how many dollars came back as revenue? A ROAS of 4× means $4 in revenue for every $1 spent. It's the metric ad platforms like Google and Meta optimise toward because it's directly observable within the platform.

However, ROAS doesn't account for your product margins. A 4× ROAS sounds great until you realise your cost of goods is 80% of revenue - making the campaign unprofitable. That's why the break-even ROAS and net profit figures (when you enter COGS) are often more actionable than ROAS alone. Your target ROAS should always be set with your margin structure in mind.

Frequently asked questions

What is a good ROAS?

There's no universal "good" ROAS - it depends entirely on your profit margins. A business with 70% margins can survive on 2× ROAS; one with 20% margins needs 6× or more to be profitable. A commonly cited benchmark is 4× for e-commerce, but always calculate your break-even ROAS (1 ÷ gross margin) first and set your target above that.

ROAS vs ROI - what's the difference?

ROAS measures revenue generated per dollar of ad spend (Revenue ÷ Ad Spend). ROI measures net profit per dollar invested ((Revenue - Total Costs) ÷ Total Costs × 100). ROI is the fuller picture because it accounts for all costs including COGS, whereas ROAS only considers ad spend. You can have a high ROAS but negative ROI if product costs are too high.

How do I improve ROAS?

ROAS = Revenue ÷ Spend, so you can improve it by increasing revenue (better targeting, stronger creatives, higher AOV offers, better landing pages) or reducing spend (cut underperforming ad sets, improve quality score to reduce CPC, narrow audience). Often the highest-leverage move is improving your post-click experience - the landing page - rather than the ad itself.