ROAS Calculator

ROAS (Return on Ad Spend) measures revenue generated per dollar spent on advertising. Use this calculator to compute ROAS, ROI, and profit. Link to master ROI calculator, Marketing ROI guide, and gross margin.

ROAS Formula

ROAS = Revenue from Ads / Ad Spend

ROAS is expressed as a ratio (e.g., 5:1) or percentage (500%). Example: $5,000 revenue from $1,000 spend = 5:1 ROAS. ROAS measures revenue efficiency; it does not subtract cost of goods sold. To get ROI, apply gross margin: Profit = Revenue × Gross Margin; ROI = (Profit − Ad Spend) / Ad Spend × 100.

When ROAS Differs from ROI

ROAS and ROI diverge when margins are below 100%. A 5:1 ROAS on 20% gross margin yields $1 of profit per $1 spent—0% ROI. At 10% margin, the same ROAS loses money. ROAS is useful for comparing ad efficiency across campaigns; ROI is required for profitability decisions. See Marketing ROI and What Is ROI? for the full picture.

Ecommerce Example

An ecommerce brand spends $20,000 on Google Ads. Revenue attributed to those ads is $80,000. ROAS = 4:1. Gross margin is 40%. Gross profit = $80,000 × 0.40 = $32,000. Profit after ad spend = $32,000 − $20,000 = $12,000. ROI = ($12,000 / $20,000) × 100 = 60%. The campaign is profitable. At 25% margin, profit would be $20,000 − $20,000 = $0—break-even.

Paid Ads Case Study

A B2B SaaS company runs LinkedIn ads at $15,000/month. Attribution (last-click, 30-day) reports $45,000 in pipeline. ROAS = 3:1. Pipeline-to-close rate is 20%; average deal size $12,000. Closed revenue = $45,000 × 0.20 × (12,000 / blended ACV) requires pipeline value modeling. If closed revenue is $30,000 and gross margin is 85%, profit = $25,500 − $15,000 = $10,500. ROI ≈ 70%. The key is connecting attributed pipeline to actual closed revenue.

Benchmark Ranges

Break-even ROAS = 1 / Gross Margin. At 30% margin, break-even ROAS = 3.33:1. See Lead Generation ROI and Email Marketing ROI for channel-specific tools.

Frequently Asked Questions