Free marketing tool
Free ROAS Calculator
Enter your ad spend and the revenue those ads brought in to get your return on ad spend (ROAS). Add your gross margin to see your break-even ROAS and whether the campaign makes a profit after product costs.
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Calculate your return on ad spend
ROAS
4.00x
400% · $4.00 back for every $1 spent
Above break-even: these ads make a profit after product costs.
- Break-even ROAS
- 2.50x
- Profit after product costs and ads
- $600
Formulas
ROAS = revenue / ad spend
Break-even ROAS = 1 / gross margin
Want ROAS per campaign, from real data? PageDuel breaks revenue down by source, campaign and landing page.
Track revenue by campaign →What is ROAS?
ROAS (return on ad spend) tells you how much revenue you get back for every dollar you spend on ads. A ROAS of 3 means each $1 of ad spend brought in $3 of revenue. You can calculate it for a whole ad account, a single campaign, an ad set, or one ad, as long as the revenue and the spend cover the same ads and the same time period.
How to calculate ROAS
The formula is: ROAS = revenue from ads / ad spend.
Example: you spend $1,000 on a campaign and it brings in $4,000 in sales. $4,000 / $1,000 = 4. Your ROAS is 4, also written as 4x or 400%.
The hard part is the revenue number. Ad platforms report the revenue they attribute to themselves, and two platforms can claim the same sale. Revenue measured on your own site, split by traffic source and campaign, gives you a number you can compare across channels.
How to calculate break-even ROAS
The formula is: break-even ROAS = 1 / gross margin.
Gross margin is the share of each sale left after the cost of the product, as a decimal. If a $100 product costs you $60 to make and ship, your margin is 40% (0.4), and your break-even ROAS is 1 / 0.4 = 2.5. Below 2.5x, every sale from those ads loses money. Above 2.5x, the ads make a profit.
This is why there is no single “good ROAS”. A business with a 70% margin breaks even at about 1.43x, while a business with a 20% margin needs 5x. Compare your ROAS with your own break-even ROAS, not with someone else's target.
ROAS vs. ROI
ROAS looks at revenue and ad spend only. ROI looks at profit and all costs. A campaign with a ROAS of 2 looks like it doubles your money, but with a 40% margin it loses money: $2,000 of revenue leaves $800 after product costs, less than the $1,000 you spent. The profit figure in the calculator above shows this directly.
How to improve ROAS
There are two levers: pay less for each click, or turn more clicks into sales. The second one is often cheaper. If your landing page converts 2% of ad visitors and a better page converts 3%, the same ad spend brings in 50% more sales, and your ROAS rises by 50% without touching the ads.
To find the leak, look at revenue by campaign and by landing page, then A/B test the page that gets the most paid traffic: the headline, the offer, the call to action, and the steps to checkout.
FAQ
How do you calculate ROAS?
Divide the revenue your ads brought in by what you spent on those ads. $4,000 of revenue from $1,000 of ad spend is a ROAS of 4, often written 4x or 400%.
What is break-even ROAS?
Break-even ROAS is the ROAS at which ads pay for themselves after product costs. It is 1 divided by your gross margin. With a 40% margin, break-even ROAS is 1 / 0.4 = 2.5x.
What is the difference between ROAS and ROI?
ROAS compares revenue with ad spend only. ROI compares profit with all costs, including product costs. A campaign can have a ROAS above 1 and still lose money if margins are thin.
See your real ROAS by campaign
PageDuel tracks revenue on your own site and breaks it down by source, campaign and landing page. Then A/B test the pages that get your paid traffic.
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