ROAS Calculator

Work out your return on ad spend, the ROAS you need just to break even at your margin, and how much profit your ads leave after paying for themselves.

Your campaign
Sales you can attribute to these ads
Revenue minus the cost of the product or service
Per sale (optional)
Used to find the most you can pay per sale
Return on ad spend
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Break-even ROAS
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Profit after ad spend
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Sales from ads
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Cost per sale
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Max cost per sale to break even
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ROAS as a percentage
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How to calculate ROAS

ROAS = Revenue from ads ÷ Ad spend
Break-even ROAS = 1 ÷ Gross margin
Profit after ad spend = (Revenue × Gross margin) − Ad spend

Example:
$12,000 ÷ $3,000 = 4.0 ROAS
1 ÷ 40% = 2.5 break-even ROAS
($12,000 × 40%) − $3,000 = $1,800 profit

Break-even ROAS by margin

ROAS on its own can mislead. The number that matters is how far above break-even you are, and break-even depends on your margin:

Gross marginBreak-even ROAS
20%5.0
30%3.3
40%2.5
50%2.0
60%1.7
80%1.25

This is why a software company can be happy at a ROAS of 2 while a retailer with thin margins loses money at 4.

How to improve ROAS

  1. Spend more on people who already know you. Retargeting site visitors and past customers usually returns more per dollar than cold audiences.
  2. Cut placements that don't convert. Review placement reports and exclude sites and apps with spend and no sales.
  3. Raise order value. Bundles, upgrades and minimums for free shipping lift revenue without more ad spend.
  4. Measure the full value. Repeat purchases and renewals count. A first-order ROAS can understate what a customer is worth.

Frequently asked questions

What is ROAS?

ROAS, or return on ad spend, is the revenue your ads bring in for every dollar spent on them. It is calculated as revenue from ads ÷ ad spend. $12,000 in revenue from $3,000 in ads is a ROAS of 4, often written 4:1 or 400%.

What is a good ROAS?

It depends on your margin. A good ROAS is one above your break-even ROAS, which is 1 ÷ gross margin. A business with a 50% margin breaks even at a ROAS of 2. A business with a 25% margin needs 4 just to cover the cost of the product and the ads.

What is break-even ROAS?

Break-even ROAS is the point where the gross profit from ad-driven sales exactly covers the ad spend. Below it, every sale loses money after advertising. The formula is 1 ÷ gross margin, so a 40% margin gives a break-even ROAS of 2.5.

What is the difference between ROAS and ROI?

ROAS compares revenue with ad spend only. ROI compares profit with total cost. A campaign can show a ROAS of 3 and still lose money if the product margin is thin. That is why this calculator shows profit after ad spend next to ROAS.

How do I measure ROAS for B2B or lead generation?

Use the value of the deals that came from ads, not the leads. Multiply ad-sourced leads by your lead-to-customer rate and your average first-year deal value to estimate revenue, then divide by ad spend. Revisit it once those deals close.

Want ads that clear break-even?

We run display, retargeting and programmatic campaigns against a ROAS or cost-per-acquisition target set from your margins. Share your numbers and we'll tell you what's realistic.

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