ROAS Calculator

Q: What ROAS should I target?

Minimum viable ROAS depends on your margins. If gross margin is 70%, you need at least 1.4× ROAS to break even. For 40% margins, you need 2.5×. Most e-commerce businesses target 4–8× ROAS for profitability. SaaS companies may accept lower ROAS (2–4×) because customer lifetime value (LTV) exceeds the initial acquisition cost.

Q: How is ROAS different from ROI?

ROAS measures revenue generated per ad dollar — it's a top-line metric. ROI measures profit generated per investment dollar — it's a bottom-line metric. A 5× ROAS doesn't mean 400% ROI, because ROAS doesn't account for product costs, fulfillment, or overhead. Always calculate true ROI alongside ROAS for complete marketing performance evaluation.

Calculate Return on Ad Spend — how much revenue your advertising generates for every dollar invested in marketing.

💰 REVENUE FROM ADS

📢 AD SPEND

RETURN ON AD SPEND

5× (400%)

NET RETURN

$40.00K

REVENUE

$50.00K

AD SPEND

$10.00K

💡 ROAS: Measuring Advertising Efficiency

ROAS (Return on Ad Spend) is the fundamental metric for evaluating advertising performance. It answers one critical question: for every dollar spent on advertising, how many dollars of revenue does it generate? ROAS = Revenue from Ads ÷ Ad Spend.

A ROAS of 5× means every $1 in ad spend generates $5 in revenue. However, ROAS alone doesn't tell you if you're profitable — you must also consider product costs, fulfillment, and overhead. A 5× ROAS with 60% gross margins yields $3 in gross profit per $1 spent — healthy. The same 5× ROAS with 20% margins yields only $1 — barely breaking even.

$50K revenue from $10K ad spend = 5× ROAS. After 50% gross margin, your actual profit from ads is $15K — a 150% return on your marketing investment.

ROAS Calculator FAQ

What ROAS should I target?▼

How is ROAS different from ROI?▼

ROAS Calculator

💡 ROAS: Measuring Advertising Efficiency

ROAS Calculator FAQ

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