ROAS Calculator
Above your 2.00x break-even. $2,200 profit after ad spend and cost of goods.
What is ROAS?
ROAS (return on ad spend) is revenue divided by ad spend. A campaign that earns 8,400 on 2,000 of spend has a ROAS of 4.2x, meaning you get 4.20 back for every 1 you put in.
It is a gross figure, measured before the cost of goods. That is why ROAS alone cannot tell you whether a campaign made money: a 4.2x return is strong on a high margin and a loss on a thin one.
To judge ROAS honestly you compare it to your break-even ROAS, which is 1 divided by your gross margin. Clear it and the campaign profits, fall short and it loses money.
How to calculate ROAS
ROAS = Revenue ÷ Ad spend · Break-even = 1 ÷ Gross margin
- Total the revenue. Add up the revenue a campaign generated over the period you are measuring.
- Total the ad spend. Add up what you paid the platform over that same period.
- Divide revenue by spend. Revenue divided by ad spend is your ROAS. 8,400 divided by 2,000 is 4.2x.
- Find your break-even. Divide 1 by your gross margin to get the ROAS you must beat. At a 50% margin that is 2.0x, so 4.2x is comfortably profitable.
Worked example
A campaign earns 8,400 in revenue from 2,000 of ad spend, at a 50% gross margin.
| Revenue from campaign | $8,400 |
|---|---|
| Ad spend | $2,000 |
| Gross profit margin | 50% |
| Result | 4.2x ROAS · profitable |
Break-even is 2.0x (1 divided by the 50% margin), so 4.2x clears it with room to spare. After the cost of goods and the ad spend, the campaign nets $2,200 in profit.
What is a good ROAS?
There is no universal good ROAS, because the number you need depends entirely on your gross margin. The honest benchmark is your own break-even ROAS, which is 1 divided by your margin: beat it and you profit.
| ROAS | Read |
|---|---|
| 1.25x break-even at an 80% gross margin | High-margin software and SaaS |
| 2.0x break-even at a 50% gross margin | Typical blended retail margin |
| 3.33x break-even at a 30% gross margin | Ecommerce and physical goods |
| 5.0x break-even at a 20% gross margin | Thin-margin resale |
The 3x to 4x target you often hear is a rule of thumb for typical margins, not a law. Always check ROAS against your own break-even rather than a generic number.
How to improve ROAS
- Lift conversion rate on the landing page so the same clicks return more revenue.
- Raise average order value with bundles, upsells or higher-tier options.
- Cut wasted spend by pausing the audiences, placements and keywords with the weakest return.
- Protect your margin: a higher gross margin lowers the break-even ROAS you have to clear.
Guides
- What is a good ROAS?A good return on ad spend is not a fixed number. It depends on your gross margin, and your break-even line decides it.7 min read
- What is MER in marketing?MER is your marketing efficiency ratio: total revenue over total marketing spend. It is the same idea as blended ROAS, and it sidesteps the attribution that channel ROAS depends on.6 min read
- ROAS vs ROI: the difference people confuseThey sound interchangeable and are not. ROAS is a gross ratio; ROI is a net percentage, and the gap between them is your margin.6 min read
- Marketing ROI: what it is and how to calculate itReturn on investment for marketing: profit divided by cost, as a percentage. The honest version uses gross profit, not revenue, and your margin decides whether it is positive.7 min read
- What is a good ROAS on Amazon?Amazon reports ACoS, the inverse of ROAS. A good number clears your break-even line, which your gross margin sets. Here is how the two connect.6 min read
- What is a good ROAS on Etsy?Etsy reports ROAS as ad revenue over ad spend, but that ignores Etsy's fees. Your real break-even runs on the margin you keep after those fees, so it sits higher than you'd think.6 min read
- What is a good ROAS for Google Ads?There is no single good ROAS for Google Ads. Set it from your margin, judge it per campaign type, and feed it into Target ROAS bidding.6 min read
- What is a good ROAS on Facebook?Meta Ads Manager hands you a confident purchase ROAS, but it almost always reads higher than the return your bank sees. Here's how to judge a Facebook and Instagram ROAS against your own break-even.7 min read
- What is a good ROAS on TikTok?TikTok is discovery, not search, so its in-platform ROAS runs lower than high-intent channels. A good number clears your break-even line and holds up on blended MER.6 min read
- What is a good ROAS on Shopify?ROAS on Shopify is a blended, store-wide number, not one ad platform. Here is the break-even it has to clear once Shopify fees, COGS and apps are netted out.6 min read
Frequently asked questions
- What is ROAS and how do you calculate it?
- ROAS (return on ad spend) is revenue divided by ad spend. A campaign earning 8,400 on 2,000 of spend is 4.2x, so you get 4.20 back for every 1 you spend. It is a gross figure, measured before the cost of goods.
- What is a good ROAS?
- It depends on your gross margin, not a fixed number. The ROAS you must beat is your break-even ROAS, which is 1 ÷ your gross margin: 2.0x at a 50% margin, 4.0x at a 25% margin. The 3x to 4x target you often hear is a rule of thumb for typical margins, not a law.
- Is a 2x ROAS good?
- It depends entirely on your margin. At a 50% margin, break-even is 2.0x, so 2x is exactly break-even. A software business at an 80% margin (break-even 1.25x) profits at 2x, while a reseller at a 30% margin (break-even 3.33x) loses money at 2x.
- Is 800% ROAS good?
- An 800% ROAS is the same as 8x: 8 in revenue for every 1 spent, since ROAS is sometimes written as a percentage. That clears break-even for almost any margin, so it is strong. At very high ROAS, watch volume: a high ratio on tiny spend can mean you are under-investing.
- What is the 70/20/10 rule in marketing?
- It is a way to split a budget by risk: about 70% into proven campaigns, 20% into promising tactics you are scaling, and 10% into experiments. It keeps most spend on reliable returns while still funding the testing that finds your next winner. It is a convention, not a formula.