Return on Ad Spend (ROAS) is a marketing metric that measures the efficacy of a digital advertising campaign. It helps businesses evaluate which methods are working and how they can improve future advertising efforts. Unlike ROI (Return on Investment), which accounts for all expenses including overhead, ROAS focuses specifically on the gross revenue generated per dollar spent on advertising.
The ROAS Formula
ROAS = Total Revenue from Ads / Total Ad Cost
How to Use This ROAS Calculator
Total Revenue: Enter the total amount of sales attributed directly to your advertising campaigns (found in Google Ads, Meta Ads Manager, etc.).
Total Ad Spend: Enter the total cost of the ads for the same period.
Product Margin: If you know your average profit margin (e.g., it costs you $60 to fulfill a $100 order, so 40% margin), enter it to see your break-even threshold.
Example Calculation
If an e-commerce store spends $1,000 on Facebook Ads and generates $5,000 in attributed sales:
ROAS Ratio: 5:1 (or 5x)
ROAS Percentage: 500%
Meaning: For every $1 spent, the business earned $5 in revenue.
What is a "Good" ROAS?
A "good" ROAS is subjective and depends heavily on your profit margins. While a 400% (4:1) ROAS is a common benchmark for e-commerce, a company with very high margins (like software) might be profitable at 200%, whereas a company with thin margins (like groceries) might need an 800% ROAS to remain profitable after accounting for the cost of goods sold (COGS).
function calculateROAS() {
var revenue = parseFloat(document.getElementById('adRevenue').value);
var spend = parseFloat(document.getElementById('adSpend').value);
var margin = parseFloat(document.getElementById('prodMargin').value);
var resultDiv = document.getElementById('roasResult');
var roasValueDisplay = document.getElementById('roasValue');
var roasPercentDisplay = document.getElementById('roasPercent');
var breakEvenDisplay = document.getElementById('breakEvenValue');
var profitStatus = document.getElementById('profitStatus');
if (isNaN(revenue) || isNaN(spend) || spend 0) {
document.getElementById('breakEvenSection').style.display = 'block';
// Formula for break-even ROAS is 1 / Margin %
var breakEvenRoas = 1 / (margin / 100);
breakEvenDisplay.innerText = breakEvenRoas.toFixed(2) + "x";
if (roas > breakEvenRoas) {
profitStatus.innerText = "✓ Your campaign is currently profitable.";
profitStatus.style.color = "#27ae60";
} else if (roas < breakEvenRoas) {
profitStatus.innerText = "⚠ Your campaign is currently losing money.";
profitStatus.style.color = "#e67e22";
} else {
profitStatus.innerText = "You are at the exact break-even point.";
profitStatus.style.color = "#34495e";
}
} else {
document.getElementById('breakEvenSection').style.display = 'none';
profitStatus.innerText = "";
}
// Smooth scroll to result
resultDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}