Campaign Numbers
Results
ROAS Calculator Guide
Return on ad spend tells you how much revenue each advertising dollar brought back. This ROAS calculator works it out, and — if you enter your gross margin — tells you the ROAS you actually need to break even.
ROAS = Revenue from ads ÷ Ad spend
$20,000 revenue from $5,000 spend is a ROAS of 4.0, often written 4:1 or 400%.
ROAS Is Not ROI
These get used interchangeably and they are not the same. ROAS uses revenue; ROI uses profit. For the same $20,000 and $5,000, ROAS is 400% but ROI is 300%, because ROI subtracts the spend first. ROAS is always the flatteringer number, which is part of why agencies like it. If you want the profit view, use our ROI calculator.
The Number Nobody Calculates: Break-Even ROAS
A 4× ROAS sounds like a triumph. Whether it is depends entirely on your margin.
Break-even ROAS = 1 ÷ gross margin. At a 25% margin you need a 4× ROAS just to cover the cost of goods — so that "great" 4× campaign made exactly nothing. At a 70% margin, break-even is about 1.43×, and 4× is genuinely excellent.
Same ROAS, opposite conclusions. This is why comparing ROAS between businesses is close to meaningless, and why a benchmark from a case study should never set your target.
What ROAS Leaves Out
Everything except the ad bill. Agency fees, creative costs, shipping, returns, payment processing, and staff time are all invisible to ROAS.
Repeat purchases. ROAS usually counts the first order only. If customers come back, the campaign is worth much more than the number says.
Attribution. ROAS credits the ad platform with revenue the platform itself reported. Platforms are not neutral about this, and the same sale is often claimed by several channels at once.
Blended vs Platform ROAS
Blended ROAS is total revenue divided by total ad spend across everything. It is less flattering and much harder to argue with, because it can't double-count. When platform ROAS looks great but the bank account doesn't, blended ROAS is usually where the truth lives.
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