ROAS Calculator
Enter your ad spend, revenue and margin to see your return on ad spend, the break-even ROAS below which ads lose money, and the target that leaves the profit you want.
- Free, no sign-up
- Break-even & target ROAS
- Profit after ads
- Break-even CPA & max CPC
1. Your ads
Use one month, or any period, as long as both numbers cover the same dates.
Conversion value in Google Ads or Meta Ads
2. Your margin
ROAS only means something next to your margin. This is what turns it into profit.
What's left of a sale after product cost, shipping and payment fees, or after materials and labor
The share of revenue you want to keep once ads are paid
3. Fine-tune (optional)
Per month, on top of ad spend
1 = judge ads on the first order only. Raise it if customers come back.
Clicks that become orders or booked jobs
Return on ad spend
Profitable4.50x450%
Every $1 of ad spend brings back $4.50 in sales. You break even at $2.50.
- Loss zone
- Break-even 2.50x
- Target 4.00x
- Profit after ads
- $4,000
- Gross profit
- $9,000
- Ad costs
- $5,000
- Margin after ads
- 18%
Break-even ROAS
2.50x
Below this, ads lose money. At $5,000 of spend that's $12,500 in revenue.
Target ROAS
4.00x
Keeps 15% of revenue as profit. In Google Ads, set tROAS to 400%.
Break-even CPA
$32.00
The most a new customer can cost. Aim for $20.00 to hit your target.
Max CPC
$0.80
The most a click can cost at a 2.5% conversion rate before you lose money.
Want a higher ROAS from the same budget?
We'll review your Google Ads account: wasted search terms, tracking, bidding and landing pages. You get a list of what to cut and what to scale. Free, no obligation.
Get a free ads auditHow to calculate ROAS
ROAS (return on ad spend) is the revenue your ads bring in for every dollar you spend on them:
ROAS = revenue from ads ÷ ad spend
Spend $5,000, get $20,000 in sales, and your ROAS is 4. You'll see it written three ways, and they all mean the same thing: 4x, 4:1 or 400%.
Take both numbers from the same period and the same source. In Google Ads, revenue is the Conv. value column and ROAS is Conv. value / cost. In Meta Ads it's Purchase ROAS.
Break-even ROAS: the number that matters first
ROAS counts revenue, not profit. A 4x ROAS is excellent for one business and a loss for another, and the difference is margin.
Break-even ROAS = 1 ÷ gross margin
With a 40% margin, each $1 of sales leaves $0.40 to pay for the ad that produced it. You need $2.50 in sales to cover $1 of spend, so break-even ROAS is 2.5x.
| Gross margin | Break-even ROAS |
|---|---|
| 20% | 5.0x |
| 30% | 3.33x |
| 40% | 2.5x |
| 50% | 2.0x |
| 60% | 1.67x |
| 70% | 1.43x |
| 80% | 1.25x |
Use gross margin before advertising: revenue minus what it costs to deliver the sale. For a store that's product cost, shipping, packaging and payment fees. For a service business it's materials and the labor on the job.
Target ROAS: break-even plus the profit you want
Breaking even isn't the goal. To keep part of each sale as profit after ads, subtract that share from your margin:
Target ROAS = 1 ÷ (gross margin − target profit margin)
With a 40% margin and a goal of keeping 15% of revenue after ads: 1 ÷ (0.40 − 0.15) = 4x. The calculator shows this figure as a percentage too, because Google Ads asks for target ROAS in that format (4x = 400%).
What the calculator adds
- Profit after ads. Gross profit from the sales, minus ad spend and fees. This is the figure to judge a campaign on.
- Agency or management fees. Platforms report ROAS on media spend only. Add your fees and every threshold moves up to cover them.
- Orders per customer. If customers come back, the first order doesn't have to carry the whole cost of winning them. Set this above 1 and the break-even applies to the first order.
- Break-even CPA. Average order value × margin × orders per customer: the most you can pay to win a customer.
- Max CPC. Break-even CPA × conversion rate: the most a click can cost before you lose money. Compare it with the average CPC in your account.
ROAS vs. ROI, POAS and MER
- ROI measures profit against the total investment. It answers "did we make money?", where ROAS answers "how much did the ads sell?"
- POAS (profit on ad spend) is gross profit ÷ ad spend. A POAS above 1 means the ads paid for themselves. It's break-even ROAS turned around, and more honest when margins differ a lot between products.
- MER (marketing efficiency ratio), also called blended ROAS, is total revenue ÷ total ad spend across every channel. It ignores attribution completely, which makes it a good check on what the platforms claim.
Why platform ROAS flatters you
The number in your ad account is usually higher than what the ads really earned:
- Branded search. People who typed your name were going to buy anyway. Their orders lift ROAS without adding sales. Look at brand and non-brand campaigns separately.
- Existing customers. Remarketing and Performance Max often spend on people already on their way back.
- View-through conversions. Someone saw an ad, didn't click, bought later. The platform still takes credit.
- Double counting. Google and Meta can both claim the same order.
- Returns and cancellations. Conversion value is recorded at checkout and rarely adjusted afterwards.
If platform ROAS says 6x and your blended ratio says 2.5x, plan your budget around 2.5x.
How to improve ROAS
- Cut waste first. Check the search terms report and add negative keywords for searches that never convert.
- Fix conversion tracking. Bidding strategies optimize toward what they can see. Missing or duplicated conversions send them the wrong way.
- Send real values. Pass actual order values, and for lead businesses the value of a qualified lead, not a flat number for every form.
- Split by margin. Group products or services with similar margins so each campaign can have its own target.
- Improve the landing page. A conversion rate that goes from 2% to 3% lifts ROAS by half with no change in spend.
- Raise order value. Bundles, minimums for free shipping and add-ons increase revenue per click.
- Move tROAS gradually. A target set far above recent results makes Google bid less and can shrink volume to nothing.
Chasing the highest possible ROAS is its own mistake. The campaigns with the best ROAS are often the smallest. What you want is the most total profit at a ROAS above your target.
ROAS for lead-generation businesses
If you sell services, ads produce leads, not orders. Convert them to revenue first: leads × lead-to-customer rate × average job value. A campaign that spent $3,000 and brought 40 leads, a quarter of which became $1,200 jobs, earned $12,000: a 4x ROAS.
Paid ads and organic search work best together. Our SEO ROI calculator runs the same profit-based math for SEO and compares its cost per lead with what you pay for ads. If you'd like a second pair of eyes on the account itself, see our PPC management services.
ROAS FAQ
ROAS = revenue from ads ÷ ad spend. If you spent $5,000 and the ads brought $20,000 in sales, ROAS is 4, written as 4x, 4:1 or 400%. All three mean the same thing: $4 of revenue for every $1 spent.
It's the ROAS at which ads neither make nor lose money. The formula is 1 ÷ gross margin. With a 40% margin, break-even ROAS is 1 ÷ 0.40 = 2.5x. Below that, every sale from ads costs more than it earns you.
One that is comfortably above your own break-even. A store with an 80% margin makes money at 2x, while a reseller with a 20% margin loses money at 4x. Work out your break-even first, then set a target that leaves the profit you want. Industry averages don't tell you much, because they ignore margin.
ROAS compares revenue with ad spend. ROI compares profit with everything you invested. A campaign can show a 300% ROAS and a negative ROI at the same time, if the margin is thin. That's why this calculator puts profit after ads next to the ROAS figure.
Start from the number the calculator shows under Target ROAS and enter it as a percentage (4x = 400%). Don't jump straight to an ambitious target: a tROAS set far above what the campaign has been achieving makes Google bid less and can choke off volume. Raise it in steps of 10–20% and watch spend and conversions.
Ad platforms report ROAS on media spend only. For your own decisions, include every cost of running ads: management fees, creative, tools. Enter fees in the optional section and the break-even and target thresholds move up to cover them.
Sometimes, on purpose. If customers reorder, the first sale can lose money and the relationship still pays. Set Orders per customer above 1 to see the break-even on the first order. Only rely on this if you actually measure repeat purchases, and you have the cash to wait for them.
Platforms take credit generously. They count people who would have bought anyway (branded search, existing customers), view-through conversions, and the same sale can be claimed by two platforms at once. Compare platform ROAS with total revenue ÷ total ad spend across all channels. If the two tell different stories, trust the second.
Get a free Google Ads audit
The calculator shows where you stand. We'll show why: wasted search terms, tracking gaps, bidding and landing pages, with a list of what to cut and what to scale.