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ROAS Calculator (Return on Ad Spend)

Updated · By the CalculatorDash editorial team · How we check our maths

Quick answer

ROAS = revenue from ads ÷ ad spend. $5,000 of spend that brings in $20,000 of sales is a 4× ROAS. Whether that's profitable depends on your margin: at a 40% gross margin the break-even ROAS is 2.5×, so this campaign makes about $3,000 profit.

Return on ad spend

$
$
%

ROAS

4

Break-even ROAS
2.5
Profit after ad spend
$3,000
Cost per order (CPA)
$20.00
Average order value
$80.00
ACoS (ad cost of sales)
25%

How this calculator works

Return on ad spend is the most common way to judge a paid campaign: how many dollars of revenue each dollar of advertising brought in. A 4× ROAS means $4 of sales for every $1 spent.

Revenue isn't profit, though. If your products cost 60% of their price to make and ship, you keep only 40 cents of each sales dollar, so you need at least $2.50 of revenue per ad dollar just to break even. That is the break-even ROAS, 1 ÷ margin, and it's the number to compare your ROAS against.

ACoS, used on Amazon, is the same idea upside down: ad spend as a percentage of sales. A 25% ACoS equals a 4× ROAS. Because platforms attribute sales differently, compare ROAS within one platform rather than across them, and check it against your actual bank balance.

The formula

ROAS
revenue from ads ÷ ad spend
Break-even ROAS
1 ÷ gross margin
Profit
revenue × margin − ad spend
ACoS
ad spend ÷ revenue × 100

Worked example

$20,000 of revenue on $5,000 of spend is a 4.00× ROAS. At a 40% margin the gross profit is $8,000, so the campaign makes $3,000 after ads. Break-even is 2.50×. With 250 orders the cost per order is $20 and the average order is $80.

Tips

  1. 01Set your ROAS target from your margin, not from an industry average.
  2. 02Count repeat purchases: a customer who buys three times can justify a lower first-order ROAS.
  3. 03Exclude branded search from prospecting results; people searching your name would often have bought anyway.

Frequently asked questions

What is a good ROAS?

One that is comfortably above your break-even ROAS. For a 50% margin that means above 2×; many e-commerce brands aim for 3–4×.

How do I calculate break-even ROAS?

Divide 1 by your gross margin as a decimal. A 30% margin needs a 3.33× ROAS to break even.

What is the difference between ROAS and ROI?

ROAS uses revenue; ROI uses profit. A campaign can have a high ROAS and still lose money if margins are thin.