ROAS Calculator
Calculate your Return on Ad Spend instantly. Enter your ad spend and revenue to measure campaign profitability and get optimization insights.
How ROAS is calculated:
ROAS = Revenue / Ad Spend. A ROAS of 3x means you earn $3 for every $1 spent on ads. Include product costs for true profitability analysis.
Total amount spent on advertising
Total revenue attributed to ads
Cost of goods sold (COGS) for products/services delivered
Understanding Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) is the most important metric for measuring the effectiveness of your advertising campaigns. It tells you exactly how much revenue you generate for every dollar spent on advertising.
How to Calculate ROAS
The ROAS formula is straightforward:
For example, if you spend $1,000 on Google Ads and generate $4,000 in revenue, your ROAS is 4x (or 400%).
What is a Good ROAS?
ROAS benchmarks vary by industry, but here are general guidelines:
- 1x ROAS: Break-even (you're making back what you spend)
- 2x ROAS: Acceptable for many businesses
- 3x ROAS: Good performance for most industries
- 4x+ ROAS: Excellent, highly profitable campaigns
However, your target ROAS should factor in your product margins. A 3x ROAS means nothing if your product costs 80% of the sale price.
ROAS vs ROI: What's the Difference?
ROAS measures revenue generated per dollar of ad spend. It's a gross metric that doesn't account for other costs.
ROI (Return on Investment) measures actual profit after all costs including product costs, overhead, and ad spend.
Industry ROAS Benchmarks
| Industry | Average ROAS | Good ROAS |
|---|---|---|
| E-commerce | 2.5x - 3x | 4x+ |
| B2B SaaS | 3x - 5x | 5x+ |
| Lead Generation | 2x - 4x | 5x+ |
| Retail | 3x - 4x | 5x+ |
How to Improve Your ROAS
- Optimize targeting: Narrow your audience to reach more qualified buyers
- Improve ad creative: Test different headlines, images, and CTAs
- Enhance landing pages: Improve conversion rates to get more sales per click
- Refine keywords: Focus on high-intent keywords and add negatives
- Use remarketing: Re-engage visitors who didn't convert initially
- Increase average order value: Upsells and bundles improve revenue per conversion
Common ROAS Mistakes to Avoid
- Ignoring attribution: Not all conversions are tracked; your true ROAS may be higher
- Looking at the wrong window: Consider your sales cycle when measuring ROAS
- Not accounting for LTV: A customer may buy multiple times, increasing true ROAS
- Optimizing too early: Give campaigns time to gather data before making changes
Want to Improve Your ROAS?
Our team specializes in maximizing ad spend efficiency. We'll audit your campaigns and find opportunities to boost your return on ad spend.
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