ROAS Calculator
Calculate your Return On Ad Spend (ROAS) to measure the effectiveness of your advertising campaigns. Optimize your marketing budget and maximize revenue with accurate ROAS metrics.
Note: Enter your campaign data below to calculate your ROAS. Monetary values should be entered as numbers without currency symbols. The calculator uses the formula: ROAS = (Revenue Generated / Ad Spend) × 100%.
Understanding Return On Ad Spend (ROAS)
Return On Ad Spend (ROAS) is a marketing metric that measures the revenue generated for every dollar spent on advertising. It helps marketers evaluate the effectiveness of their advertising campaigns and optimize their marketing budget allocation.
Basic ROAS Formula
The standard formula for calculating ROAS is:
ROAS = (Revenue Generated / Advertising Spend) × 100%
Where:
Revenue Generated = Total revenue attributed to advertising
Advertising Spend = Total cost of the advertising campaign
Profit-Based ROAS
A more advanced approach considers your profit margin:
Profit-Based ROAS = (Profit / Advertising Spend) × 100%
Where:
Profit = Revenue × Profit Margin
Profit Margin = (Revenue - Cost of Goods) / Revenue
ROAS Ratio vs. Percentage
ROAS is commonly expressed in two ways:
- As a percentage: ROAS of 300% means you earn $3 for every $1 spent on advertising.
- As a ratio: ROAS of 3:1 also means you earn $3 for every $1 spent on advertising.
Interpreting ROAS Results
Revenue-Based ROAS
- Below 100%: Losing money on ad spend
- 100-200%: Breaking even or slight profit
- 200-400%: Good performance
- Above 400%: Excellent performance
Profit-Based ROAS
- 0% or negative: Losing money
- 1-30%: Marginal performance
- 30-50%: Good performance
- Above 50%: Excellent performance
Tips for Improving ROAS
- Target audience refinement: Focus your ads on customers most likely to convert
- A/B testing: Test different ad creatives, headlines, and calls-to-action
- Landing page optimization: Improve conversion rates on your destination pages
- Bid optimization: Adjust your bids based on performance data
- Keyword refinement: Focus on high-converting keywords and negative keywords
- Retargeting campaigns: Focus on warm leads familiar with your brand
Remember that a "good" ROAS varies by industry, business model, and campaign objectives. While higher ROAS is generally better, you should establish benchmarks specific to your business and marketing goals.