ROAS Calculator
Calculate Return on Ad Spend (ROAS) - the revenue generated for every dollar spent on advertising. A critical profitability metric.
Revenue generated from ads
Total amount spent on advertising
Formula
ROAS = Total Revenue / Total Ad SpendWhere:
What is ROAS?
ROAS (Return on Ad Spend) measures how much revenue you generate for every dollar spent on advertising. It's the go-to profitability metric for e-commerce businesses and performance marketers running paid campaigns.
Understanding ROAS Values
ROAS = 5.0
You generate $5 in revenue for every $1 spent on ads
ROAS = 1.0
Break-even point - revenue equals ad spend
ROAS < 1.0
Losing money - spending more than you're earning
Target ROAS by Industry
- E-commerce: 4:1 or higher (4x return)
- B2B SaaS: 3:1 to 5:1
- Lead Generation: 5:1 to 10:1
- Retail: 4:1 to 8:1
ROAS vs ROI: What's the Difference?
ROAS focuses purely on ad spend efficiency, while ROI considers all business costs (COGS, fulfillment, overhead). A campaign can have great ROAS but poor overall ROI if product margins are thin.
Growth Tip: Don't optimize for maximum ROAS too early. Sometimes accepting a lower ROAS allows you to scale faster and capture more market share. Balance efficiency with growth goals.