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ROAS calculator: is your advertising making money?

Return on ad spend tells you how much comes back for each pound or dollar you put into ads. Add your margin to see whether the ads actually make a profit.

Start from an example

Examples only. Change every number to match your business.

CurrencyAd spend

Revenue from those ads

Sales you can trace to the ads in the same period.Your gross margin %

What's left of each sale after materials, stock or direct costs.

Your return on ad spend3.50x$7,000 back for every $2,000 spentAfter direct costs and the ads, that leaves $800 profit.

2.50xbreak-even return at your margin

$800profit after direct costs and ads

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How to use your result

Use revenue you can trace to the ads, for the same period as the spend.
Enter your gross margin, so the result shows profit, not just sales.
Compare your ROAS with the break-even figure. Above it, the ads make money; below it, they cost you.
Remember repeat visits: a customer who comes back makes a low first-sale ROAS more worthwhile.

The sums

ROAS = revenue from ads ÷ ad spend. Break-even ROAS = 1 ÷ gross margin, so at a 40% margin you need 2.5x just to cover direct costs and the ads. Profit = revenue × margin − ad spend.

Related free tools

Cost per lead calculator: What each enquiry and each paying customer from your ads costs.
Customer lifetime value calculator: What a customer is worth over time, and what you can spend to win one.

Questions about this tool

What's a good ROAS?

Anything comfortably above your break-even figure, which depends on your margin. A business with a 70% margin breaks even at about 1.4x; one with a 25% margin needs 4x.

Is ROAS the same as ROI?

No. ROAS compares revenue with ad spend. ROI compares profit with everything you spent. This calculator shows both the return and the profit.

My first-sale ROAS is low. Should I stop?

Not necessarily. If customers come back, use the lifetime value calculator to see what each one is worth over time before deciding.

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