Media Puppies
ROAS calculator
Return on ad spend is revenue from ads divided by what those ads cost. Put in your spend and revenue for the ROAS. Add your gross margin and it also shows whether that ROAS is actually making money.
Set from your location. The maths is the same in any currency — only the labels change.
For one campaign, one channel or the whole account. Keep revenue to the same scope.
From the ad platform or your store's attribution. The verdict below explains the difference.
Price minus product cost, shipping, payment fees and returns, as a share of price. Leave blank to skip the profit view.
Optional. The ROAS you are aiming for.
Runs entirely in your browser. Nothing you type is sent to us or stored anywhere.
How to calculate ROAS
The ROAS formula is one line: ROAS = revenue from ads ÷ ad spend. If a campaign costs 1 lakh and brings in 3.8 lakh of sales, ROAS is 3.8. People write the same number three ways: 3.8, 3.8x, or 380%. They all mean every rupee of spend returned 3.8 rupees of revenue.
The two inputs must cover the same thing. Use the same campaigns, the same dates and the same attribution window for both. Revenue from all channels divided by Meta spend alone is not ROAS. That is a different and much more flattering number.
What is a good ROAS?
There is no industry-wide good ROAS, because ROAS ignores costs. The number that matters is your break-even ROAS, which comes from your margin:
break-even ROAS = 1 ÷ gross margin
| Gross margin | Break-even ROAS | What it means |
|---|---|---|
| 70% | 1.43x | Ads pay for themselves early; there is room to scale. |
| 50% | 2.0x | Anything above 2x adds profit on the first order. |
| 35% | 2.86x | A 3x campaign is only just profitable. |
| 25% | 4.0x | A 3.5x campaign loses money on every sale. |
So 3x can be excellent for one brand and a loss for another. Work out your own line first. The break-even ROAS calculator does it in more detail, with shipping, returns and payment fees as separate inputs.
ROAS vs ROI vs MER
| Metric | Formula | Best used for |
|---|---|---|
| ROAS | Ad revenue ÷ ad spend | Comparing campaigns, ad sets and creatives inside one platform |
| ROI | (Profit − investment) ÷ investment | Deciding whether the whole activity is worth doing |
| MER | Total revenue ÷ total ad spend | Setting the overall budget, because no platform can inflate it |
Use ROAS for decisions inside an account and MER for decisions about the account. The blended ROAS and MER calculator puts the two side by side.
Why the ROAS in Ads Manager is usually higher
- Shared credit. A buyer who clicked a Meta ad and later a Google ad is counted as a sale by both.
- View-through conversions. Someone who only saw an ad and bought days later can still be credited to it.
- Sales you would have had anyway. Branded search and retargeting pick up buyers who were already coming.
None of this makes platform ROAS useless. It stays the best signal for which ad set to back. It just should not be the only number behind a decision to double the budget.
Raising ROAS without cutting reach
ROAS rises when revenue per click goes up or cost per click comes down. In practice the biggest levers are a landing page that converts better, a higher average order value through bundles, and creative that attracts buyers rather than browsers. Cutting spend to the best-performing retargeting audience also lifts ROAS, but it usually shrinks total profit. Watch profit after ad spend in the calculator above, not ROAS alone.
Running Meta or Google for an ecommerce brand? Our performance marketing team sets ROAS targets from your margin before the first campaign goes live.
Questions
How do you calculate ROAS?+
Divide the revenue that came from ads by what you spent on those ads. Revenue of 4 lakh from 1 lakh of spend is a ROAS of 4, often written 4x or 400%.
What is a good ROAS?+
There is no universal number. A good ROAS is one above your break-even ROAS, which is 1 divided by your gross margin. A 50% margin breaks even at 2x; a 25% margin needs 4x before ads make any money.
What is the difference between ROAS and ROI?+
ROAS compares revenue with ad spend. ROI compares profit with the total investment. A campaign can show a healthy ROAS and still lose money once product cost, shipping and fees are taken out.
Should I use the ROAS shown in Meta or Google Ads?+
Use platform ROAS to compare campaigns and ad sets inside one platform. For budget decisions, check it against total revenue from your store or accounts, because platforms count some of the same sales twice.
Is ROAS useful for lead generation?+
Only once leads have a value. Most lead-gen accounts work with cost per lead and cost per sale instead, and switch to ROAS when closed revenue is fed back to the ad platform.
Other free tools
- Break-even ROAS calculator
- Blended ROAS and MER calculator
- Contribution margin calculator
- CAC ceiling calculator
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