ROAS Return on Ad Spend Calculator

Enter ad spend and revenue to calculate ROAS value and multiplier, evaluate ad investment effectiveness.

Suitable For：Marketing、Campaign｜Metric Type：ROI、Cost
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Used to calculate breakeven ROAS, e.g., 40 represents 40% margin

multiplier

Expected ROAS multiplier, e.g., 3 represents 3x (300%)

Result: Awaiting Input
Please enter ad spend and revenue above, then click "Calculate" to see results here.

How to Use This ROAS Calculator

Using this return on ad spend calculator is simple, just four steps:

  1. Enter Ad Spend:Fill in total ad spend for this campaign or period (including all advertising costs)
  2. Enter Ad Revenue:Fill in revenue directly attributable to this advertising (excluding other sources)
  3. Optional Gross Margin (optional):To know breakeven ROAS, fill in product gross margin percentage
  4. Optional Target ROAS (optional):If preset target exists, fill in expected ROAS multiplier, system will automatically determine achievement

What is ROAS?

ROAS is "Return on Ad Spend," the most direct metric for measuring advertising effectiveness, calculated by dividing ad-generated revenue by ad spend. For example, ROAS of 3 means every $1 ad spend generates $3 revenue (or 300% return). ROAS widely used in e-commerce, digital advertising, election campaigns requiring precise investment effectiveness tracking. Unlike ROI (Return on Investment), ROAS focuses on direct advertising returns without considering other costs.

ROAS Calculation Formulas

Basic Formula

ROAS (multiplier) = Ad-Generated Revenue ÷ Ad Spend ROAS (percentage) = ROAS (multiplier) × 100%

Example: Ad spend $50,000, revenue generated $150,000 ROAS = 150,000 ÷ 50,000 = 3x (300%)

Breakeven ROAS

Breakeven ROAS = 100 ÷ Gross Margin Rate (%)

Example: Product gross margin 40% Breakeven ROAS = 100 ÷ 40 = 2.5x Meaning: ROAS must reach at least 2.5x to break even

Actual Profit Calculation

Actual Profit = (Ad Revenue × Gross Margin Rate) - Ad Spend

Example: Ad spend $50,000, revenue $150,000, gross margin 40% Actual Profit = (150,000 × 0.4) - 50,000 = $10,000

Why Calculate ROAS?

Understanding ROAS is critical for evaluating ad investment effectiveness. Through ROAS calculation, you can:

  • Quantify Ad Effectiveness:Use concrete numbers to measure direct ad investment returns, avoid intuitive judgment
  • Optimize Ad Budget:Compare ROAS across channels, creatives, audiences to concentrate budget on high-performing channels
  • Set Reasonable Goals:Calculate breakeven ROAS based on margin, set achievable and profitable ROAS targets
  • Evaluate Ad Sustainability:Determine if advertising can generate long-term positive cash flow, avoid unprofitable spending
  • Report to Management:Use ROAS, a simple clear metric, to prove ad investment value to executives or clients
  • Compare Different Periods:Track ROAS trend changes, quickly identify effectiveness decline and adjust strategy

ROAS Application Scenarios

ROAS calculator widely applies to these scenarios:

  • E-commerce Advertising:Calculate ROI for Facebook, Google, LINE digital advertising
  • Promotional Campaign Evaluation:Evaluate ad effectiveness for Double 11, anniversary sales promotions
  • New Product Launch:Test new product ad ROI, decide whether to expand delivery
  • Election Ad Effectiveness:Calculate political ad-generated donations or support increase equivalent value
  • Brand E-commerce KPI:Set monthly or quarterly ROAS targets as advertising team performance metrics
  • Channel Effectiveness Comparison:Compare ROAS across platforms (Meta Ads vs. Google Ads)
  • Budget Planning:Based on historical ROAS data, forecast next campaign required ad budget

ROAS Related Terms

ROI (Return on Investment)
Return on investment, calculated as: (revenue - cost) ÷ cost. ROI considers all costs (including labor, logistics, manufacturing), ROAS only looks at ad spend.
Gross Margin
Profit ratio after deducting product cost from selling price. E.g., price $100, cost $60, gross margin 40%. Gross margin determines breakeven ROAS.
Breakeven ROAS
Minimum ROAS needed to break even. Formula: 100 ÷ gross margin. E.g., 40% margin, breakeven ROAS is 2.5x.
Attribution
Method to determine revenue source. Common methods include "Last Click," "First Click," "Linear." Different attribution models yield different ROAS calculations.
LTV (Lifetime Value)
Customer lifetime value, total revenue one customer generates over entire lifecycle. For long-term ROAS calculation, should consider LTV rather than single purchase amount.

Frequently Asked Questions

Q: What is a good ROAS?

A: Good ROAS depends on gross margin. Generally, e-commerce ROAS should reach at least 2-3x to break even, 4-5x+ is excellent. High-margin products (digital products, courses) can accept lower ROAS (1.5-2x), low-margin products (3C, appliances) need higher ROAS (3-5x). Key is ROAS must exceed breakeven ROAS for actual profit.

Q: What's the difference between ROAS and ROI?

A: ROAS only looks at "direct ad spend returns," formula: revenue ÷ ad spend. ROI looks at "overall investment net profit," formula: (revenue - all costs) ÷ all costs. ROAS better for evaluating ad effectiveness, ROI better for evaluating overall business profitability.

Q: How to improve ROAS?

A: Methods to improve ROAS include: (1) Optimize ad creative, increase click-through and conversion rates (2) Precise audience targeting, reduce ineffective impressions (3) Increase average order value (through cross-selling, combo offers) (4) Improve product pages, increase conversion rate (5) Retarget visitors, increase repurchase rate (6) Exclude low-performing keywords or audiences (7) Test different bidding strategies.

Q: Are this calculator's results accurate?

A: This calculator uses standard ROAS formulas, mathematical logic is completely correct. However ROAS accuracy depends on whether "revenue attribution" is correct. If users contact ads through multiple channels (like seeing Facebook ad first, then searching Google to purchase), different attribution models yield different ROAS. Recommend using GA4 or ad platform attribution reports to ensure revenue data accuracy.