Updated · Built and checked by the PlinzoTools team, formulas tested against published sources
Calculate Return on Ad Spend from ad spend and revenue generated.
4.00x
Return on Ad Spend (ROAS) measures revenue generated per dollar spent on advertising -- the core efficiency metric for any paid marketing campaign.
Enter ad spend and revenue generated from those ads. ROAS appears instantly as a ratio (e.g. "4x").
ROAS = Revenue from Ads / Ad Spend
Suppose a hypothetical store spends 1,000 on an ad campaign and the platform attributes 4,000 in sales to it. Dividing 4,000 by 1,000 gives a ROAS of 4.00, shown as 4.00x, meaning 4 of revenue for every 1 spent. Those are the defaults in the calculator. If a second campaign spends 1,000 and produces 2,500, its ROAS is 2.50x, so the first is clearly more efficient at generating revenue.
4,000 / 1,000 = 4.00x
A ROAS that sounds good can still lose money. ROAS counts revenue, not profit, so you need to know your gross margin. If your product costs you 60 percent of the selling price, then only 40 percent of each sale remains to pay for ads and everything else. A break-even ROAS is 1 divided by your gross margin: with a 40 percent margin, that is 2.50x. Below that level, every ad-driven sale loses money even before overhead. With a 70 percent margin the break-even is about 1.43x. Work this out for your own products before you decide what counts as a good result. Then use the ROI Calculator for a fuller profitability view.
The revenue figure usually comes from the advertising platform's own reporting, and platforms use their own attribution rules and time windows. They may credit a sale to an ad that a customer saw but did not click, or to more than one platform at the same time. Your analytics tool or store backend may show different totals for the same period. Neither is perfect, so be consistent about which source you use, and where possible compare against your actual total sales to see whether the reported numbers make sense.
Compare ROAS across campaigns, audiences, and creatives to decide where to shift budget, but keep sample size in mind. A campaign that has spent very little may show a strikingly high or low ROAS purely by chance. Also watch how ROAS changes as spending increases. Returns often diminish as you scale, because the first dollars reach the most interested people. A campaign that shows 5x at a small budget might drop when you multiply the budget.
Finally, pair ROAS with cost measures such as CPC and conversion rate to understand why it moved. A falling ROAS might come from more expensive clicks, from a weaker landing page, or from a change in average order value, and each has a different fix.
ROAS is a simple revenue-to-spend ratio; ROI additionally nets out cost of goods and other costs, giving actual profitability rather than just revenue efficiency. See the ROI Calculator.
Revenue generated by the ads divided by the amount spent on them. Spending 2,000 to generate 9,000 in revenue is a ROAS of 4.5, often written as 4.5:1 or 450%.
It depends on your margin. Your break-even ROAS is 1 divided by your profit margin: at a 25% margin you need a ROAS of 4 just to cover the ad spend. Anything above your break-even ROAS is profitable on that spend.
ROAS compares revenue with ad spend and ignores other costs. ROI compares profit with total cost, so it is the stricter measure of profitability.
The ratio divides by ad spend, so a zero spend has no ROAS. Revenue can be zero, which simply gives a ROAS of 0.
Reference: Google Search Central