ROAS calculator

The platform metric

ROAS is revenue divided by ad spend

Return on ad spend measures the conversion value or revenue attributed to advertising for each dollar spent on the ads. It can be written as a multiple, ratio or percentage.

Google Ads defines conversion value per cost as total conversion value divided by the total cost of ad interactions. Its target ROAS example expresses $5 in sales for each $1 in spend as 500%. See Google Ads: About Target ROAS bidding.

Revenue is not profit

Add gross margin before judging campaign performance

A 4× ROAS means $4 of attributed revenue for each $1 of ad spend. It does not say how much of that revenue remains after products, fulfillment, payment processing, refunds or service delivery. This calculator first applies your gross margin, then subtracts ad spend and other campaign costs.

Use a gross margin from the same products, customers and attribution period as the campaign. A blended company margin can hide an unprofitable product mix.

Work backward from economics

Break-even and target ROAS depend on margin

Break-even revenue is the amount needed for gross profit to cover ad spend and the other campaign costs entered. Dividing that revenue by ad spend produces break-even ROAS. A target profit margin requires more revenue because part of every revenue dollar must remain as profit.

If the target profit margin equals or exceeds gross margin, no amount of revenue can reach it under the entered economics. Improve the pre-ad margin or lower the target before using a target ROAS.

Worked campaign

$20,000 of revenue from $5,000 of ad spend

The headline ROAS is 4×. At a 40% gross margin, the campaign creates $8,000 of gross profit before advertising. Subtracting $5,000 of ad spend and $500 of other campaign costs leaves $2,500, or a 12.5% campaign profit margin.

With a 10% profit-margin target, the same costs require about 3.67× ROAS. At the current revenue, the maximum ad budget for that target is $5,500.

No universal benchmark

A “good” ROAS is the one that clears your economics

High-margin software can profit at a ROAS that would lose money for a low-margin retailer. Attribution quality, repeat purchases, refunds, branded demand and incremental lift also affect what the result means. Compare like campaigns and keep the measurement window consistent.

• ROAS answers how much attributed revenue advertising generated per dollar spent.
• CPA answers how much ad spend was required per entered order or conversion.
• Campaign profit applies the entered margin and costs to estimate what remained.
• ROI is a broader return measure and should not be used as another name for ROAS.

Scope and limitations

Attribution remains the largest assumption

The result is only as reliable as the revenue and costs entered. Ad platforms can use different attribution windows and may claim overlapping conversions. This tool does not estimate incrementality, customer lifetime value, cash flow or tax, and it does not pull data from an advertising account.

For a conservative view, use net revenue after expected returns, include agency, creative and tool costs, and test the result with a lower margin or revenue assumption.