Advertising economics

ROAS Calculator

Calculate return on ad spend from ad spend and attributed revenue. Add conversion and margin assumptions to check CPA, break-even ROAS, and profit after ads.

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Calculate ROAS

Ad spend Attributed revenue

Campaign metrics

Conversions / orders Target ROAS

Break-even & profitability

Contribution margin % Target post-ad profit margin %

Compare scenarios

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What ROAS measures

Return on ad spend compares attributed revenue with advertising spend. ROAS answers how much attributed revenue was generated for each unit of ad spend. It does not by itself show profit.

ROAS formula

ROAS = attributed revenue ÷ ad spend. If ad spend is $100 and attributed revenue is $500, ROAS is 5×, or 500%.

Break-even ROAS

When contribution margin is known, break-even ROAS is 1 ÷ contribution margin as a decimal. At a 40% contribution margin, break-even ROAS is 2.5×. This assumes the margin already reflects the variable costs you intend to include before advertising cost.

ROAS vs ROI

ROAS is a revenue-efficiency metric. ROI compares profit or gain with investment cost. A campaign can show a high ROAS and still be unprofitable if margins or other costs are weak.

Target ROAS and reverse planning

Use target ROAS to calculate the attributed revenue required for a given ad spend, or the maximum ad spend supported by a given attributed revenue figure.

Contribution margin assumptions

Use a contribution margin that matches your business model. It may reflect product cost, payment fees, shipping, refunds, or other variable costs if you have already incorporated them. This calculator does not invent those costs for you.

Attribution limits

Attributed revenue depends on the reporting source, attribution model, date window, and conversion definitions you use. Compare spend and revenue over matching periods and review source data before making budget decisions.

Common mistakes

Treating attributed revenue as profit.
Mixing spend and revenue from different date windows.
Using gross margin assumptions that omit important variable costs.
Comparing platform-reported conversions that use different attribution models.
Assuming one universal ROAS target works for every business.

Questions

What is a good ROAS?

There is no universal answer. A workable ROAS depends on margin, overhead, cash flow, customer economics, and how attributed revenue is measured.

How do I calculate break-even ROAS?

Divide 1 by contribution margin expressed as a decimal. A 25% margin gives a 4× break-even ROAS.

Can ROAS be below 1?

Yes. A 0.8× ROAS means attributed revenue is 80% of ad spend. Whether a campaign is acceptable still depends on the business context and measurement setup.