ROAS Calculator

What is ROAS? – ROAS Meaning

ROAS (Return on Advertising Spend) is the amount of revenue a business generates for every dollar spent on advertising.

Simply put, it is the amount of money you get back from the amount of money you put into advertising.

How to Calculate ROAS – ROAS Calculator

The ROAS formula is simple (but if you want to make it even easier, use our ROAS Calculator above):

ROAS = (Revenue from advertising / Cost of advertising)

Normally, ROAS is measured as a percentage, dollar value, or ratio.

As a percentage: ROAS x 100 = ROAS%

What is a Good ROAS? – Target ROAS

A good ROAS depends on your primary objectives. 

• If your ROAS is less than 100%, your advertising is at a loss. 
• To calculate break-even ROAS, your ROAS would be 100%.
• 400% ROAS is in a good spot
• 800%+ ROAS is great and should cover all associated operational costs.

ROAS vs ROI

ROI and ROAS are metrics used to assess the effectiveness of a marketing campaign or investment. Return on Ad Spend calculates the money made for every dollar spent on advertising, while the profitability of an investment is measured by ROI (Return on Investment).

ROAS is concerned with advertising performance, whereas ROI is a more general measure of profitability. When assessing the success of a campaign or investment, it’s important to evaluate both metrics.

For example:

ROAS: A company spends $700 on advertising and generates $7000 in revenue from that advertising. The ROAS would be 10, calculated as $7000 in revenue / $700 in ad spend. Use our ROAS Calculator above to test it out.

ROI: An investor puts $1000 into a stock and sells it for $1500, earning a profit of $500. The ROI would be 50%, calculated as $500 profit / $1000 investment.