What is ROAS and how do I calculate it?
ROAS (Return on Ad Spend) measures revenue generated per dollar spent on advertising. The formula is: ROAS = Revenue from Ads ÷ Ad Spend. For example, if you spend $100 and earn $400, your ROAS is 4x or 400%. Our calculator does this instantly in Simple Mode, or calculates it from CPC, conversion rate, and AOV in Advanced Mode.
How do I calculate ROAS from CPC and conversion rate?
Use our Advanced Mode: (1) Calculate clicks: Ad Spend ÷ CPC, (2) Calculate conversions: Clicks × Conversion Rate, (3) Calculate revenue: Conversions × Average Order Value, (4) Calculate ROAS: Revenue ÷ Ad Spend. The calculator automates all these steps instantly.
What's the difference between ROAS and ROI?
ROAS measures ad efficiency (Revenue ÷ Ad Spend) while ROI measures total profitability including all business costs (Net Profit ÷ Total Investment × 100). ROAS of 3x with high operating costs might result in low or negative ROI. Our calculator shows both metrics.
What is a good ROAS for my business?
It depends on your profit margins. If you have a 25% profit margin, you need 4x ROAS to break even. Generally, 4:1 is considered healthy, but e-commerce often targets ROAS above 4 due to production costs. Service businesses with higher margins might profit at 2-3x ROAS.
Can I use this for Facebook Ads, Google Ads, and TikTok?
Absolutely. Our calculator works for all advertising platforms including Google Ads, Facebook/Meta Ads, Instagram, TikTok, LinkedIn, Twitter/X, Pinterest, Microsoft Ads, and any other paid advertising channel. The math is universal.
What is CPA and how does it relate to ROAS?
CPA (Cost Per Acquisition) is how much you pay to acquire one customer. It's calculated as: Ad Spend ÷ Number of Conversions. Lower CPA improves ROAS. Our Advanced Mode calculates CPA automatically alongside your ROAS and ROI.
How can I improve my ROAS?
Five proven strategies: (1) Lower CPC through better ad targeting and quality scores, (2) Increase conversion rate with landing page optimization, (3) Boost Average Order Value through upsells, (4) Improve ad targeting to reach high-intent customers, (5) Test and eliminate underperforming ad creatives.
Is my data private when using this calculator?
Yes, completely private. All calculations run locally in your browser using JavaScript. We don't store, collect, or transmit any data to servers. No login required, no tracking, no data sharing.
What's break-even ROAS?
Break-even ROAS is the minimum return needed to cover all costs without profit or loss. Calculate it as: 1 ÷ Profit Margin. If your profit margin is 20%, break-even ROAS is 5x. Anything above means profit; below means losses.
Can I calculate ROAS for lead generation campaigns?
Yes, in Advanced Mode. Instead of Average Order Value, use the monetary value of a lead (based on your sales team's close rate and average deal size). For example, if 10% of leads convert at $500 average sale, each lead is worth $50.
What conversion rate should I expect?
The average B2B conversion rate is around 2.6%. E-commerce typically sees 1-3% for cold traffic and 5-10% for retargeting campaigns. Your actual rate depends on industry, product, traffic quality, and landing page effectiveness.
What does 5x ROAS mean?
A 5x ROAS means you earn $5 in revenue for every $1 spent on advertising. For example, if you spend $1,000 on ads and generate $5,000 in sales, your ROAS is 5x or 500%. This is generally considered excellent performance for most industries.
Is 2x ROAS profitable?
It depends on your profit margins. A 2x ROAS means you're generating $2 for every $1 spent. If your product costs and operating expenses are 40% of revenue, you're breaking even. If they're lower, you're profitable. Use our calculator to check your specific profit margin.
How to increase ROAS on Facebook Ads?
Focus on these tactics: (1) Test ad creative variations weekly, (2) Use Lookalike Audiences based on top customers, (3) Implement retargeting campaigns (typically 5-10x higher ROAS), (4) Optimize for purchase events not just clicks, (5) Exclude low-intent placements like Audience Network.
What's the average ROAS for e-commerce?
E-commerce businesses typically see 4:1 to 10:1 ROAS depending on product margins and competition. Fashion and accessories average 6-8x, while electronics see 3-5x due to lower margins. Luxury goods can achieve 10-15x ROAS with the right targeting.
What if my ROAS is negative or below 1?
ROAS below 1 means you're spending more than you earn—immediate action needed. Common fixes: pause worst-performing ad sets, reduce CPC bids, improve landing page conversion rate, target higher-intent keywords, or increase product prices/AOV. Sometimes campaigns need 2-4 weeks of optimization before becoming profitable.
How do I calculate ROAS for lead generation campaigns?
For lead gen, assign a monetary value to each lead. Calculate: (1) Lead value = Average deal size × Close rate, (2) Total revenue = Leads × Lead value, (3) ROAS = Revenue ÷ Ad Spend. Example: 100 leads × $50 value = $5,000 revenue. $1,000 spend = 5x ROAS.
What's the difference between ROAS and ROAS percentage?
ROAS is typically shown as a ratio (4x) or percentage (400%). They're the same: 4x = 400%. Some platforms show one format, others show both. Our calculator displays both for clarity.
How often should I check my ROAS?
Check daily during active campaigns, weekly for ongoing optimization, and monthly for strategic planning. Daily checks help catch issues early, while monthly reviews show long-term trends and inform budget allocation decisions.
Can I use this calculator for offline advertising?
Yes! While designed for digital ads, the ROAS formula works for any advertising. For TV, print, or radio ads, use total ad spend and track revenue from those channels (using promo codes, landing pages, or call tracking) to calculate ROAS.
What is a good ROAS for Google Shopping ads?
Google Shopping typically sees 3-6x ROAS for most e-commerce stores. Higher-margin products (fashion, accessories) can achieve 6-10x, while lower-margin items (electronics) may need 4-5x to be profitable. Use our calculator to find your break-even point.
How does attribution affect ROAS calculations?
Attribution determines which ad gets credit for a sale. First-click, last-click, and multi-touch attribution can show different ROAS for the same campaign. Use consistent attribution windows when comparing ROAS across platforms. Our calculator uses the data you provide, so ensure it matches your platform's attribution model.
What ROAS should I target for a new product launch?
New products often start with lower ROAS (2-3x) as you test audiences and creative. Accept lower ROAS initially to gather data, then optimize to 4x+ within 2-4 weeks. If ROAS stays below 2x after a month, reconsider the product-market fit or pricing strategy.
How do I calculate ROAS with attribution windows?
Attribution windows (1-day, 7-day, 28-day click) affect when revenue is credited. Use the same window across all platforms for fair comparison. Our calculator uses the revenue data you input—ensure it matches your platform's attribution settings for accurate ROAS.
What's a good ROAS for retargeting campaigns?
Retargeting campaigns typically achieve 5-10x ROAS because visitors are already familiar with your brand. If retargeting ROAS is below 4x, your audience may be too broad or your creative needs improvement. Retargeting should be your highest-ROAS channel.
How do I improve ROAS on a limited budget?
Focus on: (1) Pause underperforming campaigns to concentrate budget, (2) Use exact match keywords (Google) or lookalike audiences (Facebook) for better targeting, (3) Optimize landing pages for conversion, (4) Increase AOV with bundles, (5) Test creative weekly to find winners.
What is blended ROAS vs platform-specific ROAS?
Blended ROAS combines all platforms into one metric (total revenue ÷ total spend). Platform-specific ROAS shows each channel separately. Both are valuable: blended shows overall performance, platform-specific helps allocate budget. Our calculator can do both—calculate each platform separately, then combine totals.
How does seasonality affect ROAS?
ROAS fluctuates with seasons. Holiday periods (Q4) often see higher ROAS due to increased purchase intent, while summer months may see lower ROAS. Compare ROAS year-over-year for the same period, not month-to-month, to account for seasonality.
What ROAS should I expect for brand awareness campaigns?
Brand awareness campaigns typically have lower or unmeasurable ROAS since they don't directly drive sales. Instead, measure: (1) Brand lift studies, (2) Organic search increases, (3) Direct traffic growth, (4) Social mentions. For direct response, aim for 4x+ ROAS.
How do I calculate ROAS for subscription businesses?
For subscriptions, use Lifetime Value (LTV) instead of one-time revenue. Calculate: (1) LTV = Monthly Revenue × Average Customer Lifetime, (2) ROAS = LTV ÷ Ad Spend. Example: $50/month × 12 months = $600 LTV. $100 ad spend = 6x ROAS. This shows true profitability.