ROAS Calculator: Calculate Your
Return on Ad Spend
Use our free ROAS calculator to instantly measure your advertising effectiveness, cost per acquisition, and break-even point.
Want to learn the formula in depth? See our complete ROAS formula guide.
ROAS Calculator
Calculate your Return on Ad Spend instantly
Input Values
Total amount spent on advertising
Revenue generated from ad campaigns
Number of sales/conversions to calculate CPA
Enter to calculate break-even ROAS
Results
Enter your ad campaign data
Results will appear here
Know Your True Profitability
StoreRadar tracks revenue, profit margins, and customer LTV—the metrics you need to know if your ad spend is actually paying off.
What is ROAS (Return on Ad Spend)?
Understanding the key metric for measuring advertising effectiveness
Return on Ad Spend (ROAS) measures the revenue generated for every dollar spent on advertising. It's one of the most important metrics for evaluating the effectiveness of your paid marketing campaigns and determining where to allocate your advertising budget.
The ROAS Formula
Example: If you spend $2,000 on ads and generate $10,000 in revenue:
ROAS = $10,000 ÷ $2,000 = 5x (500%)
Understanding your ROAS is essential because it directly tells you whether your advertising is profitable. A ROAS of 5x means you earn $5 for every $1 spent on ads. However, a "good" ROAS depends on your profit margins—if your margin is 25%, you need at least 4x ROAS just to break even on ad spend.
Understanding Break-Even ROAS
What ROAS you need to avoid losing money on ads
Break-Even: 5x ROAS
With thin margins, you need exceptional ad performance to be profitable. Focus on high-intent campaigns and optimize ruthlessly.
Break-Even: 2.5x ROAS
Healthy margins give you more room to experiment. You can invest in awareness campaigns and still maintain profitability.
Break-Even: 1.67x ROAS
High-margin products can be profitable even with modest ROAS. You have flexibility to scale aggressively.
Pro Tip: Calculate Your Break-Even ROAS
Use the formula: Break-Even ROAS = 1 ÷ Profit Margin. If your gross margin is 35%, your break-even ROAS is 1 ÷ 0.35 = 2.86x. Any ROAS above this number generates profit; anything below means you're losing money on each sale from ads.
How to Calculate ROAS (Step-by-Step)
Follow these four steps to calculate your Return on Ad Spend
Track Your Ad Spend
Gather the total amount spent on advertising for the period you want to measure. Include all ad platforms (Google, Meta, TikTok, etc.) for a complete picture.
Measure Revenue from Ads
Determine the revenue directly attributable to your ad campaigns. Use proper attribution tracking (UTM parameters, conversion pixels) to connect sales to specific ads.
Apply the ROAS Formula
Divide your ad revenue by your ad spend. A result of 4 means you earned $4 for every $1 spent. Express this as 4x or 400%.
Compare to Break-Even ROAS
Calculate your break-even ROAS (1 ÷ profit margin) to understand if your campaigns are actually profitable after accounting for product costs.
ROAS vs Related Metrics
Understanding how ROAS relates to other advertising metrics
| Metric | Definition | Formula | Example |
|---|---|---|---|
| ROAS | Revenue generated per ad dollar | Revenue ÷ Ad Spend | 5x |
| ROI | Profit relative to total investment | (Profit - Cost) ÷ Cost × 100 | 150% |
| CPA | Cost to acquire one customer | Ad Spend ÷ Conversions | $25 |
| CPM | Cost per thousand impressions | (Ad Spend ÷ Impressions) × 1000 | $12 |
| CTR | Click-through rate | (Clicks ÷ Impressions) × 100 | 2.5% |
ROAS Benchmarks by Platform
Typical ROAS ranges across major advertising platforms
| Platform | Typical ROAS | Notes |
|---|---|---|
| Google Ads (Search) | 4:1 - 8:1 | High intent, typically strong ROAS |
| Google Ads (Shopping) | 4:1 - 6:1 | Product-focused, good for ecommerce |
| Meta (Facebook/Instagram) | 3:1 - 5:1 | Discovery-focused, varies by vertical |
| TikTok Ads | 2:1 - 4:1 | Younger audience, growing platform |
| Pinterest Ads | 3:1 - 5:1 | High purchase intent, strong for visual products |
Note: These are general benchmarks. Actual ROAS varies significantly by industry, product, targeting, and creative quality.
How to Improve Your ROAS
Four strategies to increase your return on ad spend
Optimize Targeting
Refine your audience targeting to reach people more likely to convert. Use lookalike audiences, retargeting, and exclude low-value segments to improve efficiency.
Improve Ad Creative
Test different ad formats, headlines, and visuals. Strong creative can dramatically improve CTR and conversion rates, directly boosting ROAS.
Optimize Landing Pages
Ensure your landing pages are fast, mobile-friendly, and aligned with ad messaging. Even small conversion rate improvements significantly impact ROAS.
Increase Average Order Value
Upsells, bundles, and free shipping thresholds increase revenue per conversion without increasing ad spend, directly improving ROAS.
Common ROAS Mistakes to Avoid
Four errors that lead to poor advertising decisions
Ignoring Profit Margins
A 3x ROAS looks great until you realize your profit margin is only 20%. At that margin, you need 5x ROAS just to break even. Always calculate break-even ROAS for your business.
Poor Attribution
Multi-touch customer journeys make attribution complex. Relying solely on last-click attribution overvalues bottom-funnel ads and undervalues awareness campaigns.
Ignoring Customer Lifetime Value
ROAS only measures immediate revenue. If your customers have high LTV, a seemingly unprofitable 2x ROAS campaign might actually be your most valuable investment.
Comparing Across Platforms Without Context
Different platforms have different attribution windows and methodologies. A 5x ROAS on Meta isn't directly comparable to 5x ROAS on Google without understanding these differences.
ROAS vs ROI: What's the Difference?
Understanding when to use each metric
ROAS
Revenue ÷ Ad Spend
- Measures revenue efficiency
- Specific to ad campaigns
- Ignores other costs
- Best for campaign optimization
ROI
(Profit - Cost) ÷ Cost × 100
- Measures actual profitability
- Accounts for all costs
- Broader business view
- Best for strategic decisions
When to use each: Use ROAS for day-to-day campaign optimization and comparing ad performance across platforms. Use ROI for strategic decisions about overall marketing budget and when considering product costs, overhead, and long-term profitability.
Frequently Asked Questions
Common questions about Return on Ad Spend
ROAS stands for Return on Ad Spend. It's a marketing metric that measures the revenue generated for every dollar spent on advertising. For example, a ROAS of 4x means you earn $4 in revenue for every $1 spent on ads. It's one of the most important metrics for evaluating advertising effectiveness.
The ROAS formula is simple: ROAS = Revenue from Ads ÷ Ad Spend. For example, if you spend $1,000 on ads and generate $5,000 in revenue, your ROAS is $5,000 ÷ $1,000 = 5x (or 500%). This means you earned $5 for every $1 invested in advertising.
A 'good' ROAS varies by industry, profit margins, and business goals. Generally, a ROAS of 4:1 (400%) is considered good for most ecommerce businesses. However, the minimum acceptable ROAS depends on your profit margin. If your margin is 25%, you need at least 4x ROAS to break even. Higher-margin products can be profitable at lower ROAS.
ROAS measures revenue generated per ad dollar spent, while ROI (Return on Investment) measures profit relative to total investment. ROAS = Revenue ÷ Ad Spend, while ROI = (Profit - Investment) ÷ Investment × 100. ROAS is revenue-focused and specific to advertising; ROI accounts for all costs and measures actual profitability.
Break-even ROAS = 1 ÷ Profit Margin. For example, if your profit margin is 40%, your break-even ROAS is 1 ÷ 0.40 = 2.5x. This means you need to generate $2.50 in revenue for every $1 spent on ads just to cover costs. Any ROAS above this number is profitable.
Both metrics are valuable but serve different purposes. ROAS is better for revenue-focused campaigns and when average order values vary significantly. CPA (Cost Per Acquisition) is useful when all conversions have similar value or for lead generation. Many advertisers track both: ROAS for efficiency and CPA for cost control.
Understand Your Store's Profitability
StoreRadar gives you the revenue, margin, and LTV insights you need to make smarter advertising decisions for your WooCommerce store.
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