Free calculator
ROAS calculator. And the break-even your margin actually sets.
Four questions, one tool: the ROAS you got, the revenue a target demands, the budget that target allows, and the point at which your gross margin says the ads stop losing money. Free to use, and it works in any currency as long as both inputs use the same one. We ask for a work email once, before the first result.
ROAS = revenue ÷ ad spend
Your result
4.00×
returned for every 1 spent on ads
The maths
Use gross margin after cost of goods, shipping and payment fees for the break-even tab. A retail markup flatters the number and moves the target in the wrong direction.
Reading the number
Three things a ROAS figure will not say on its own.
Break-even ROAS is the only benchmark that is yours
A 4× target copied from a case study means nothing without the margin behind it. At a 40% gross margin you break even at 2.5×, so 3× is profit. At a 20% margin you break even at 5×, and that same 3× is losing money on every order. Set the target from the margin, then argue about the rest.
Blended and platform-reported ROAS are different numbers
Ads Manager credits itself for sales it influenced and sales it merely witnessed. Total revenue divided by total ad spend is the harsher figure and the one that matches the bank account. Pick one, say which it is, and do not compare last month's blended number against this month's reported one.
ROAS falls as spend rises, and that is not a failure
The cheapest demand gets bought first. Pushing budget past it always drags the average down, so a scaling account with a flat ROAS is usually an account that has stopped scaling. Judge a budget increase on the profit it added, not on whether the ratio held.
FAQ
ROAS, answered.
What is ROAS?
ROAS stands for return on ad spend: the revenue an advertising campaign produced divided by what it cost to run. A ROAS of 4 means every 1 spent on ads returned 4 in revenue. It measures revenue, not profit, which is why it has to be read against your gross margin.
How do you calculate ROAS?
Divide the revenue attributed to your ads by the ad spend that produced it. ROAS = revenue ÷ ad spend. For 800,000 in revenue on 200,000 of spend, the ROAS is 4, usually written 4×.
What is a good ROAS?
The only universal answer is: above your break-even. Break-even ROAS is 1 divided by your gross margin, so a 40% margin breaks even at 2.5× and a 20% margin at 5×. Anything above that adds gross profit, though it still has to cover fixed costs before the business is ahead. Benchmarks from other people's businesses carry other people's margins.
How do I calculate break-even ROAS?
Divide 1 by your gross margin. Break-even ROAS = 1 ÷ gross margin, so a 40% gross margin gives 1 ÷ 0.4 = 2.5×. Use gross margin after cost of goods, shipping and payment fees, not your retail markup.
What is the difference between ROAS and ACoS?
They are the same fact stated in opposite directions. ACoS is ad spend as a percentage of revenue, ROAS is revenue as a multiple of ad spend, and each is the other inverted: a 4× ROAS is a 25% ACoS. Marketplaces such as Amazon report ACoS, paid social reports ROAS.
ROAS or MER: which should I track?
Both, for different jobs. ROAS on a campaign tells you whether that campaign is worth its budget. MER, total revenue divided by total marketing spend, tells you whether the business is actually growing, and it does not care how the platforms attribute. Optimise on ROAS, take decisions on MER.
Why does my ROAS drop when I increase the budget?
Because the cheapest demand is bought first. Extra budget reaches people who were less ready, so the average return falls even when the additional spend is still profitable. The question to ask is whether the extra spend cleared break-even, not whether the ratio stayed where it was.
ROAS tells you it moved. It never tells you which ad moved it.
Marxx rolls spend, revenue and cost per result up by hook, format and angle instead of by ad ID, so the reason a number changed survives into the next round, and every finding opens as a storyboard you can publish.