What this calculator does
Return on ad spend measures how much revenue a campaign generated for every dollar spent on it. A ROAS of 4× means four dollars of revenue came back for every dollar spent on ads, before accounting for the cost of the product itself.
ROAS is a revenue measure, not a profit measure. A high ROAS on a low-margin product can still lose money once the cost of goods is factored in, which is why this calculator also shows profit after ad spend and the ROI percentage, so revenue and cost are not confused with each other.
The formula
Divide revenue generated by the campaign by the amount spent on ads to get the ROAS multiplier. ROI restates the same information as a percentage gain over the spend, and profit after ad spend is simply revenue minus that spend.
| Term | Meaning |
|---|---|
| ROAS | Return on ad spend: revenue ÷ ad spend, shown as a multiplier. |
| ROI | Return on investment: (revenue − spend) ÷ spend × 100, the percentage gain over the spend. |
| Revenue | The total revenue attributed to the campaign being measured. |
The inputs explained
| Field | What to enter |
|---|---|
| Revenue generated ($) | The total revenue attributed to the campaign. |
| Ad spend ($) | The total amount spent on ads to generate that revenue. |
When to use it
Judging campaign performance at a glance
ROAS is the headline figure most e-commerce and performance-marketing dashboards lead with, because it summarises revenue efficiency in a single number.
Setting a minimum acceptable return
Comparing ROAS against the break-even level worked out from your profit margin (see the break-even ROAS calculator) shows whether a campaign is actually profitable, not just revenue-positive.
Comparing campaigns of very different sizes
ROAS is a ratio, so it allows a fair comparison between a small test campaign and a much larger one, unlike comparing raw revenue or spend figures directly.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How ROAS and profit change as revenue increases at a fixed spend
A fixed $1,500 spend, against a range of revenue outcomes.
| Revenue generated | ROAS | ROI | Profit after ad spend |
|---|---|---|---|
| $1,500 | 1.00× | 0.000% | $0.00 |
| $3,000 | 2.00× | 100.0% | $1,500.00 |
| $4,500 | 3.00× | 200.0% | $3,000.00 |
| $6,000 | 4.00× | 300.0% | $4,500.00 |
| $9,000 | 6.00× | 500.0% | $7,500.00 |
| $15,000 | 10.00× | 900.0% | $13,500.00 |
How ROAS changes as spend increases at a fixed revenue
A fixed $6,000 in revenue, spread across a range of spend levels.
| Ad spend | ROAS | ROI | Profit after ad spend |
|---|---|---|---|
| $1,000 | 6.00× | 500.0% | $5,000.00 |
| $1,500 | 4.00× | 300.0% | $4,500.00 |
| $2,000 | 3.00× | 200.0% | $4,000.00 |
| $3,000 | 2.00× | 100.0% | $3,000.00 |
| $4,000 | 1.50× | 50.0% | $2,000.00 |
| $6,000 | 1.00× | 0.000% | $0.00 |
Questions
What is a good ROAS?
It depends entirely on profit margin: a low-margin business needs a much higher ROAS to break even than a high-margin one. The break-even ROAS calculator works out that threshold from your own margin, which is a more useful benchmark than a generic industry figure.
Is ROAS the same as ROI?
They describe the same underlying numbers differently. ROAS states revenue as a multiple of spend (4.0×); ROI states the gain as a percentage of spend (300%). A ROAS of 1.0× is always the same thing as an ROI of 0%.
Can ROAS be high but the campaign still unprofitable?
Yes. ROAS only measures revenue, not the cost of the product sold. A campaign with high ROAS on a low-margin or heavily discounted product can still lose money once product costs are included.
How should ROAS targets differ by campaign goal?
A campaign aimed at pure profit needs to clear the break-even ROAS for that margin. A campaign aimed at new-customer acquisition or brand growth is sometimes deliberately run below that level, treating the shortfall as an acceptable acquisition cost.
To find the minimum ROAS your margin requires before a campaign is profitable, use the break-even ROAS calculator. For the cost side of the same equation, see the CPA calculator.