Marketing ROI
ROAS Calculator
ROAS — return on ad spend — is revenue divided by ad spend. Spend $1,000 on ads that generate $5,000 of revenue and your ROAS is 5.0x, or 500%. Enter your campaign’s revenue and spend below for your ROAS as a ratio and a percentage.
What is a good ROAS?
A ROAS of 4.0x (400%) is the commonly used healthy benchmark for e-commerce advertising, and 2.0x–3.0x is typical for many small advertisers — but the only ROAS that truly matters is your break-even ROAS, which depends on your gross margin. A business with a 25% gross margin loses money below 4.0x, while a business with a 60% margin profits from 1.7x upwards. Work yours out with the break-even ROAS calculator before judging any campaign by generic benchmarks.
How it works
ROAS is the standard efficiency measure in digital advertising — Google Ads and Meta both report it — and the formula is the same on every platform. Whether you searched for a ROAS calculator, a return on ad spend calculator or an ROAS formula, this is the whole calculation:
ROAS = revenue from ads ÷ ad spendROAS (%) = (revenue from ads ÷ ad spend) × 100A ROAS of 5.0x and a ROAS of 500% are the same number in two dialects: every $1 of advertising returned $5 of revenue. What ROAS deliberately leaves out is cost — it counts revenue, not profit. A 500% ROAS on a product with a 10% gross margin still loses money, which is why serious advertisers pair ROAS with margin (see the break-even ROAS page). Use revenue your ads actually generated — attributed sales over the same period as the spend — and be consistent about whether you count gross or net (after refunds) revenue.
What counts as a good ROAS
| ROAS | Meaning | Typical reading |
|---|---|---|
| Below 1.0x (100%) | Ads return less revenue than they cost | Losing money before any costs — pause and fix |
| 1.0x – 2.0x | $1–$2 of revenue per $1 spent | Only viable with very high gross margins |
| 2.0x – 4.0x | $2–$4 of revenue per $1 spent | Typical range for many small e-commerce advertisers |
| 4.0x and above | $4+ of revenue per $1 spent | The commonly cited healthy benchmark |
| 8.0x and above | $8+ of revenue per $1 spent | Excellent — or a sign spend could scale further |
Source: ROAS is defined identically by Google Ads and Meta (revenue ÷ cost). The reading bands are widely used planning conventions — whether a given ROAS is profitable depends on your gross margin, which is what the break-even ROAS calculator works out. Last verified: November 2026
Worked examples
Example 1 — a healthy e-commerce campaign
| Revenue from ads | $5,000.00 |
| Ad spend | $1,000.00 |
| ROAS | 5.0x |
| ROAS as a percentage | 500% |
| Revenue minus ad spend | $4,000.00 |
Profitable as long as the gross margin on that $5,000 of sales exceeds $1,000 — i.e. the margin is above 20%.
Example 2 — a typical small-advertiser result
| Revenue from ads | $1,200.00 |
| Ad spend | $600.00 |
| ROAS | 2.0x |
| ROAS as a percentage | 200% |
| Revenue minus ad spend | $600.00 |
At a 50% gross margin this campaign exactly breaks even on profit; at a 40% margin it loses money despite a ‘200% return’.
Example 3 — a campaign that is quietly losing
| Revenue from ads | $850.00 |
| Ad spend | $1,000.00 |
| ROAS | 0.85x |
| ROAS as a percentage | 85% |
| Revenue minus ad spend | −$150.00 |
Below 1.0x the ads return less revenue than they cost — no margin can rescue that.
When these fees apply — and the limitations
ROAS is a revenue metric, and its blind spots are well known:
- It ignores product costs. Revenue is not profit; always judge ROAS against your gross margin (the break-even ROAS page does the maths).
- Attribution is imperfect. Google and Meta each claim credit for sales using their own windows and models, and the same sale can be claimed by both. Use one consistent attribution source per decision.
- It excludes other costs — agency fees, creative production, platform and payment fees (Stripe’s 2.9% + $0.30 quietly removes about 3% of the revenue figure).
- Refunds and returns inflate revenue if you do not subtract them; use net revenue where you can.
Comparing your options
ROAS tells you revenue per advertising dollar; it does not tell you profit. The companion number is your break-even ROAS — the return at which ad spend exactly consumes your gross margin. Compare every campaign’s ROAS here against the break-even figure from the break-even ROAS calculator: above it, the campaign makes money; below it, it only looks like it does.
Frequently asked questions
How is ROAS calculated?
ROAS = revenue generated by the ads ÷ the amount spent on the ads. If $1,000 of ad spend produces $5,000 of sales, the ROAS is $5,000 ÷ $1,000 = 5.0, usually written as 5.0x or, multiplied by 100, as 500%. Both forms mean the same thing: five dollars of revenue per advertising dollar.
What is the difference between ROAS and ROI?
ROAS measures revenue against ad spend only. ROI (return on investment) measures profit against all the costs involved — product costs, fees, salaries and the ad spend itself. ROAS is faster to read inside an ad account; ROI is the number that decides whether the business made money. A campaign can have an excellent ROAS and a negative ROI if margins are thin.
Is a ROAS of 300% good?
It depends entirely on your margin. At a 300% ROAS ($3 of revenue per $1 spent), you break even if your gross margin is 33.3% — because a third of the revenue is available to pay for the ads. With a 50% margin, 300% is profitable; with a 25% margin, you are losing money on every sale. Calculate your own break-even point rather than trusting universal benchmarks.
Why do Google Ads and my shop report different ROAS figures?
Because they measure differently: ad platforms use their own attribution windows (for example, crediting a sale to an ad clicked days earlier), count gross revenue, and cannot see refunds processed later. Your shop’s figures are net and complete. Small differences are normal; large ones usually mean the attribution windows or the revenue definitions differ.
How can I improve a low ROAS?
The levers are the ratio’s two sides: raise revenue per click (better targeting, better landing page conversion, higher average order value) or cut wasted spend (negative keywords, pausing poor audiences, fixing mismatches between the ad promise and the product page). Also check the unglamorous one — a tracking error can make a healthy campaign look like a 0.85x.
Read the guide: What Is ROAS? (And What a Good ROAS Looks Like) — the formula, the benchmarks, and the break-even number that actually matters.
Related calculators
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