Calculate your return on ad spend
Measure advertising return on ad spend as a ratio and percentage from revenue and ad spend.
Formula: Revenue / Ad Spend
How to use the ROAS calculator
Enter revenue attributed to advertising and total ad spend. The calculator shows return on ad spend as both an x multiple and a percentage. If you enter gross margin, it also shows a simplified break-even ROAS based on that margin.
ROAS formula
ROAS = Revenue from ads / Ad spend. If $1,000 in ad spend generates $5,000 in attributed revenue, ROAS is 5.00x, or 500%.
Example: $1,000 ad spend
With $1,000 in spend, 2x ROAS means $2,000 in attributed revenue, 5x means $5,000, and 10x means $10,000. Revenue is not the same as profit, so business margin still matters.
Planning examples
These examples are mathematical scenarios designed to help with planning. They are not claims about typical market performance.
| Ad spend | 1x ROAS | 2x ROAS | 5x ROAS | 10x ROAS |
|---|---|---|---|---|
| $100 | $100 | $200 | $500 | $1,000 |
| $500 | $500 | $1,000 | $2,500 | $5,000 |
| $1,000 | $1,000 | $2,000 | $5,000 | $10,000 |
| $5,000 | $5,000 | $10,000 | $25,000 | $50,000 |
| $10,000 | $10,000 | $20,000 | $50,000 | $100,000 |
Break-even ROAS and margin
A simplified break-even ROAS can be estimated as 1 divided by gross margin expressed as a decimal. At a 50% gross margin, the simplified break-even ROAS is 2x; at 25%, it is 4x. Real profitability can also include shipping, payroll, discounts, taxes, returns, platform fees and other operating costs.
Frequently asked questions
What does 4x ROAS mean?
It means the campaign generated four units of attributed revenue for each one unit of advertising spend.
Is ROAS the same as ROI?
No. ROAS focuses on ad revenue versus ad spend. ROI can include a broader set of business costs and profit.
What is break-even ROAS?
It is the ROAS needed to cover costs under a defined margin assumption. The exact threshold depends on your economics.
Can a campaign have high ROAS and still lose money?
Yes, especially when product costs, fees, returns or overhead are high enough to absorb the gross margin.