ROAS Calculator

Calculate Return On Advertising Spend Instantly

Simply enter revenue and advertising cost to automatically calculate ROAS (Return On Advertising Spend). Understand how much revenue each dollar spent on advertising generated and evaluate the profitability of your marketing investment.

ROAS Calculation Tool

Practical Use Cases

The ROAS calculator can be used in the following situations:

1. Evaluate Campaign Profitability

Compare ROAS across multiple advertising campaigns to identify the most profitable channels and tactics. Use for optimizing budget allocation.

2. Calculate Ad Budget Break-Even Point

Set minimum ROAS threshold based on profit margin. For example, with 30% profit margin, ROAS 333% or higher achieves profitability. Use this standard to decide campaign continuation.

3. Set Goals with Ad Agencies

Present ROAS as KPI to advertising agencies and share clear performance targets. Review ROAS in regular reports to drive operational improvements.

4. Analyze Seasonal Variations

Calculate ROAS by month/quarter to analyze advertising efficiency during seasons and events. Improve annual profitability by adjusting advertising strategy for peak and off-peak periods.

What is ROAS (Return On Advertising Spend)

ROAS (Return On Advertising Spend) is a metric showing revenue generated per dollar of advertising cost. It expresses how much revenue the advertising investment produced as a percentage.

Formula

ROAS (%) = (Revenue ÷ Ad Spend) × 100

Calculation Example

If ad spend is $500,000 and revenue is $2,000,000: ROAS = (2,000,000 ÷ 500,000) × 100 = 400% This means $4 in revenue was generated per $1 of ad spend.

Guidelines and Criteria

ROAS evaluation varies by profit margin: • ROAS below 100%: Loss (ad spend > revenue) • ROAS 100-200%: Near break-even (depends on profit margin) • ROAS 200-400%: Good (most industries profitable) • ROAS 400%+: Excellent (high profitability) The key is the relationship between ROAS and profit margin. For example, with 30% profit margin, ROAS 333% or higher achieves profitability ($100 ad spend → $333 revenue = $100 profit). Calculate the minimum required ROAS from your profit margin.

Frequently Asked Questions (FAQ)

What's the difference between ROAS and ROI?

ROAS (Return On Advertising Spend) is 'Revenue ÷ Ad Spend', while ROI (Return On Investment) is 'Profit ÷ Ad Spend'. ROAS evaluates based on revenue, ROI based on profit. High ROAS with low profit margin results in low ROI. Viewing both provides accurate evaluation.

How should I set ROAS targets?

Calculate backwards from profit margin. For example, with 25% profit margin, break-even ROAS is 400% (100 ÷ 0.25). In practice, set higher considering operating costs and labor. Most companies target ROAS 300-500%.

How can I improve low ROAS?

Two approaches: ① Increase revenue: improve CVR, raise average order value, strengthen upsell/cross-sell. ② Reduce ad spend: narrow targeting, optimize bid prices, stop low-performing ads. Usually pursue both simultaneously.

What's the average ROAS by industry?

Varies significantly by industry. Generally, E-commerce (200-400%), BtoB SaaS (300-600%), Travel/Hotels (400-800%), Finance/Insurance (300-500%). However, appropriate values change based on profit margin and business model, so it's important to set targets based on your profit structure.

What should be included in revenue for ROAS calculation?

Generally, include only direct sales from advertising. However, attribution analysis may include indirect contributions. The key is to standardize measurement methods and use the same criteria for comparisons.

Can ROAS 100% still be profitable?

No, ROAS 100% means 'ad spend = revenue', which always results in loss considering profit margin. Even with 50% profit margin, $100 ad spend generating $100 revenue yields $50 profit, resulting in $50 net loss. Minimum ROAS 200% or higher needed (for 50% profit margin).

Should ROAS be measured separately for new customer acquisition vs. repeat customer ads?

Yes, strongly recommended. Typically, repeat customer ads have higher ROAS. Evaluate new customer acquisition by LTV (Lifetime Value) even with lower ROAS, and evaluate repeat customer ads by ROAS. It's important to use appropriate metrics based on purpose.

Are calculation results saved by this tool?

No, all calculations are performed real-time in your browser and never transmitted to any server. Confidential information like revenue and ad spend is not stored and deleted when you close the page. You can use it with complete privacy protection.