ROAS Calculator
Calculate Return on Ad Spend (ROAS).
Enter revenue and ad spend to see how much you earn for every dollar spent on advertising.
ROAS (Return on Ad Spend) measures how much revenue is generated for every dollar spent on advertising. It is the primary performance metric for paid media campaigns.
Core ROAS formula:
ROAS = Revenue Generated / Ad Spend
ROAS is expressed as a ratio (e.g., 4.0×) or equivalently as a percentage (400%).
Worked example:
Ad spend: $2,500. Revenue attributed to those ads: $10,000.
ROAS = $10,000 / $2,500 = 4.0×
This means every $1 spent returned $4 in revenue.
Break-even ROAS:
Break-Even ROAS = 1 / Gross Margin
If your product has a 35% gross margin:
Break-Even ROAS = 1 / 0.35 = 2.86×
You must achieve at least 2.86× ROAS before the ad is profitable.
Profit-based ROAS target:
Target ROAS = (Revenue per Conversion / Ad Cost per Conversion)
or equivalently: ROAS > Break-Even ROAS by your desired profit margin
ROAS benchmarks by industry (approximate, 2025):
| Industry | Average ROAS |
|---|---|
| eCommerce (general) | 3–5× |
| Fashion / apparel | 3–6× |
| Home goods | 2–4× |
| B2B SaaS | 2–3× |
| Finance / insurance | 3–7× |
| Travel | 5–8× |
ROAS vs. ROI:
ROAS measures revenue return on ad spend only.
ROI factors in all costs including COGS, overhead, and fulfillment:
ROI = (Revenue − Total Costs) / Total Costs × 100
A campaign can have a high ROAS but negative ROI if product margins are thin. Always analyze both metrics together for a complete picture.