.calc-container { background: #ffffff; padding: 25px; border-radius: 8px; box-shadow: 0 4px 6px rgba(0,0,0,0.1); margin-bottom: 30px; }
.calc-header { margin-bottom: 20px; text-align: center; }
.calc-group { margin-bottom: 15px; }
.calc-group label { display: block; font-weight: bold; margin-bottom: 5px; color: #2c3e50; }
.calc-group input { width: 100%; padding: 12px; border: 1px solid #ddd; border-radius: 4px; font-size: 16px; box-sizing: border-box; }
.calc-btn { width: 100%; background-color: #0073aa; color: white; border: none; padding: 15px; font-size: 18px; font-weight: bold; border-radius: 4px; cursor: pointer; transition: background 0.3s; }
.calc-btn:hover { background-color: #005177; }
#roas-result { margin-top: 20px; padding: 20px; border-radius: 4px; display: none; text-align: center; }
.result-success { background-color: #e7f4e4; border: 1px solid #c3e6cb; }
.result-warning { background-color: #fff3cd; border: 1px solid #ffeeba; }
.result-val { font-size: 24px; font-weight: bold; color: #2ecc71; display: block; margin: 10px 0; }
.article-section h2 { color: #2c3e50; margin-top: 30px; border-bottom: 2px solid #0073aa; padding-bottom: 5px; }
.article-section p { margin-bottom: 15px; }
.example-box { background: #f0f4f8; padding: 15px; border-left: 5px solid #0073aa; margin: 20px 0; }
What is ROAS and Why Does It Matter?
Return on Ad Spend (ROAS) is a primary marketing metric that measures the amount of revenue your business earns for every dollar spent on advertising. Unlike ROI (Return on Investment), which accounts for all costs including overhead and manufacturing, ROAS focuses specifically on the gross revenue generated per ad dollar.
For e-commerce businesses and digital marketers, ROAS is the compass that guides budget allocation. It tells you which campaigns are profitable and which are draining your resources.
The ROAS Calculation Formula
The math behind ROAS is straightforward but powerful:
ROAS = (Total Revenue from Ad Campaign) / (Total Cost of Ad Campaign)
Typically, ROAS is expressed as a ratio (e.g., 5:1) or a percentage (500%). A 5:1 ratio means that for every $1 you spend on ads, you generate $5 in revenue.
Real-World ROAS Examples
Example 1: High Performance
If you spend $2,000 on Facebook Ads and generate $10,000 in sales, your ROAS is 5.0 (or 500%). This indicates a highly efficient campaign.
Example 2: Break-Even Analysis
If you spend $1,500 on Google Ads and generate $1,500 in sales, your ROAS is 1.0 (100%). While you aren't losing money on the ad spend, you are likely losing money overall once product costs and shipping are factored in.
What is a "Good" ROAS?
A "good" ROAS varies significantly by industry, profit margins, and business stage. However, a common benchmark is 4:1 (400%).
- Under 3:1: May indicate you are barely breaking even after accounting for Cost of Goods Sold (COGS).
- 4:1 to 6:1: Generally considered a healthy, profitable range for most e-commerce businesses.
- Above 10:1: Exceptional performance, indicating high demand or a highly optimized funnel.
function calculateROAS() {
var revenue = document.getElementById("totalRevenue").value;
var spend = document.getElementById("totalAdSpend").value;
var resultDiv = document.getElementById("roas-result");
var resultText = document.getElementById("resultText");
var revNum = parseFloat(revenue);
var spendNum = parseFloat(spend);
if (isNaN(revNum) || isNaN(spendNum) || spendNum <= 0) {
resultDiv.style.display = "block";
resultDiv.className = "result-warning";
resultText.innerHTML = "
Please enter valid numbers. Ad spend must be greater than zero.";
return;
}
var roasRatio = revNum / spendNum;
var roasPercent = roasRatio * 100;
resultDiv.style.display = "block";
resultDiv.className = "result-success";
var interpretation = "";
if (roasRatio = 4) {
interpretation = "Excellent! Your campaign is generating strong returns.";
} else {
interpretation = "Your campaign is in a moderate performance range.";
}
resultText.innerHTML = "