How do you calculate ROAS?

ROAS is calculated by dividing your total campaign revenue by your total advertising spend. For example, if you spent $1,000 on ads and generated $4,000 in revenue, your ROAS would be 4:1 or $4 for every $1 spent.

What does 400% ROAS mean?

A 400% ROAS means you're generating $4 in revenue for every $1 spent on advertising (4:1 ratio). This is generally considered a strong performance, though what's 'good' depends on your industry and profit margins.

What is the difference between ROI and ROAS?

ROAS focuses specifically on advertising revenue vs. ad spend, while ROI considers your overall profit after all expenses (including production costs, overhead, and other business expenses). ROAS is more immediate and campaign-focused, while ROI provides a complete profitability picture.

How much ROAS is good?

A good ROAS typically ranges from 3:1 to 5:1, but it varies significantly by industry and profit margins. E-commerce businesses often aim for 4:1 or higher, while businesses with lower margins may need 6:1 or more to be profitable. Always consider your specific cost structure and business goals.

ROAS Calculator

Quickly see how much revenue your ads generate per dollar spent with our ROAS calculator.

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How ROAS Calculator Works

ROAS (Return on Ad Spend) is a straightforward metric that shows you exactly how much revenue your advertising campaigns generate for every dollar you invest. By simply dividing your campaign revenue by your total ad spend, you get a clear picture of your advertising efficiency.

This calculator is perfect for businesses running digital marketing campaigns across platforms like Google Ads, Facebook, or any paid advertising channel. It helps you make smart budget decisions by showing which campaigns are actually making you money.

The optional average order value calculation gives you additional insights into customer purchasing behavior, helping you understand not just how much revenue you're generating, but also how your advertising affects customer spending patterns.

ROAS Calculator Formula Breakdown

Formula

ROAS = Generated revenue ÷ Total ad spend
Average order value = Generated revenue ÷ Number of orders

Variables Explained

Generated revenueThe total revenue attributed to your advertising campaign. This includes all sales that can be directly traced back to your ads, typically tracked through conversion pixels, UTM parameters, or platform attribution windows. Make sure you're using the same timeframe as your ad spend.
Total ad spendThe complete amount spent on your advertising campaign, including platform fees, creative costs, and any third-party management fees. This should match the same time period as your revenue tracking for accurate ROAS calculation.
Number of orders generatedThe total count of individual transactions or orders that resulted from your advertising campaign. This optional metric helps calculate average order value and provides insight into customer purchasing behavior beyond just revenue.

Example Calculation

Given:

Generated revenue: $10,000.00
Total ad spend: $2,000.00
Number of orders generated: 200 orders

Calculation:

ROAS = $10,000.00 ÷ $2,000.00 = $5.00 per $1 spend
Average order value = $10,000.00 ÷ 200 = $50.00

Result:

$5.00 per $1 spend

Explanation

This example shows a successful e-commerce campaign where every dollar spent on advertising generated $5 in revenue, with customers averaging $50 per order. This 5:1 ROAS indicates a highly efficient campaign that's likely very profitable.

Tips for Using ROAS Calculator

💡Track ROAS over at least 30-day periods to account for longer purchase cycles and attribution windows, as some customers may see your ad but purchase days later.
💡Include all advertising costs (platform fees, creative production, management) for accurate ROAS calculation - many businesses only count platform spend and get misleading results.
💡Consider your profit margins when evaluating ROAS - a 2:1 ROAS might be great for high-margin products but unprofitable for low-margin businesses.

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