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function calculateROAS() { var revenue = parseFloat(document.getElementById('adRevenue').value); var cost = parseFloat(document.getElementById('adSpend').value); var outputDiv = document.getElementById('roasOutput'); var valueDisplay = document.getElementById('roasValue'); var percentDisplay = document.getElementById('roasPercentage'); if (isNaN(revenue) || isNaN(cost) || cost = 4) { outputDiv.style.backgroundColor = '#e8f5e9'; valueDisplay.style.color = '#2e7d32'; } else if (roas >= 2) { outputDiv.style.backgroundColor = '#fff3e0'; valueDisplay.style.color = '#ef6c00'; } else { outputDiv.style.backgroundColor = '#ffebee'; valueDisplay.style.color = '#c62828'; } valueDisplay.innerHTML = "Your ROAS is " + roas.toFixed(2) + "x"; percentDisplay.innerHTML = "This represents a " + percentage.toFixed(2) + "% return on your advertising investment."; }

Understanding ROAS: The Key Metric for Digital Marketing

Return on Ad Spend (ROAS) is a vital marketing metric that measures the amount of revenue your business earns for every dollar it spends on advertising. Unlike ROI (Return on Investment), which accounts for all costs including overhead and manufacturing, ROAS focuses specifically on the effectiveness of your advertising campaigns.

How to Calculate ROAS

The formula for ROAS is straightforward:

ROAS = Total Revenue / Total Ad Spend

Example Calculation

Imagine your company spends $2,000 on a Google Ads campaign in a single month. From that campaign, you track exactly $10,000 in sales. To find your ROAS:

• Revenue: $10,000
• Ad Spend: $2,000
• Calculation: $10,000 / $2,000 = 5

In this scenario, your ROAS is 5x (or 5:1). This means for every $1 you spent on ads, you generated $5 in revenue.

What is a "Good" ROAS?

While a "good" ROAS varies significantly by industry, profit margins, and business stage, here is a general benchmark:

• Below 2x: Often indicates a loss after accounting for product costs and overhead.
• 2x to 4x: Considered sustainable for many businesses, though profit margins may be thin.
• 4x and Above: Generally considered a very successful campaign with high profitability.

Why ROAS Matters for SEO and PPC

By using this ROAS calculator, digital marketers can quickly identify which campaigns are over-performing and which need optimization. High ROAS allows you to confidently scale your budget, while a low ROAS signals the need to improve your ad copy, landing pages, or keyword targeting strategy.