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ROAS Calculator

Calculate your Return on Ad Spend to measure the effectiveness of your advertising campaigns.

Calculator

The total sales value generated directly from your ad campaigns.
$
The total amount spent on advertising platforms.
$
RETURN ON AD SPEND
5.00x
Healthy

Exceptional performance. This level of ROAS allows for aggressive scaling.

Formula

ROAS = Total Revenue ÷ Total Ad Spend

Worked example

If you generated $10,000 in revenue from a campaign that cost $2,500, your ROAS would be: ROAS = $10,000 ÷ $2,500 = 4.0x This means for every $1 spent on ads, you earned $4 in revenue.

Total Revenue from Ads
10000
Total Ad Spend
2500

Industry benchmarks

Poor

You are likely losing money when considering other costs like COGS and fulfillment.

Average

Most businesses are profitable at this range, but there is room for optimization.

Healthy

Exceptional performance. This level of ROAS allows for aggressive scaling.

FAQ & key takeaways

How to read this metric

What it measures

Return on Ad Spend (ROAS) measures the amount of revenue your business earns for each dollar it spends on advertising. For example, a ROAS of 5:1 (or 5x) means that for every $1 spent on advertising, you generate $5 in revenue.

Why it matters

ROAS is a critical metric for evaluating the performance of specific advertising campaigns, ad groups, or individual ads. Unlike ROI, which considers the overall profitability of an investment after all expenses, ROAS focuses specifically on gross revenue generated by ad spend.

How to improve ROAS

  1. Optimize Targeting: Ensure your ads are being shown to the most relevant audience.
  2. Improve Ad Creative: Test different images, videos, and copy to see what resonates best.
  3. Landing Page Optimization: Ensure your landing pages are fast, mobile-friendly, and highly relevant to the ad.
  4. Keyword Refinement: In search advertising, use negative keywords to avoid wasting spend on irrelevant searches.