ROAS Calculator

ROAS versus ROI - a subtle but important difference

ROAS compares revenue directly against ad spend as a simple ratio, while marketing ROI typically subtracts costs from revenue first before dividing - the two metrics answer related but distinct questions, and mixing them up can cause real confusion when reporting results.

Worked example

For $4,000 in revenue generated from $1,000 in ad spend:

ROAS = 4000 / 1000 = 4.0:1 (4.0x return)

Frequently asked questions

What's a good ROAS target? Many advertisers target a minimum 3:1 to 4:1 ROAS as a baseline profitability threshold, though the right target depends heavily on profit margins - a business with thin margins needs a much higher ROAS to be profitable than one with high margins.

Why doesn't ROAS account for non-ad costs? ROAS deliberately isolates advertising efficiency specifically - it doesn't factor in product cost, fulfillment, or overhead, which is exactly why a "good" ROAS number still needs to be checked against overall business profit margins before declaring a campaign a true success.