Calculate your Return on Ad Spend instantly. Compare against your industry benchmark and see if your campaigns are truly profitable — not just generating revenue.
Return on Ad Spend (ROAS) measures how much revenue you generate for every dollar spent on advertising. A 4:1 ROAS means you earn $4 in revenue for every $1 spent. Unlike ROI, ROAS measures revenue against ad spend only — not total costs including cost of goods. Use this calculator's COGS input to get your true profitability ROAS.
ROAS (Return on Ad Spend) = Revenue from Ads ÷ Total Ad Spend. A ROAS of 4 means you earned $4 for every $1 spent on advertising. Unlike ROI, ROAS doesn't account for cost of goods — use gross profit ROAS for a true profitability picture by entering your COGS percentage.
A good ROAS depends on your industry and profit margins. As a general benchmark: 4:1 is acceptable, 6:1 is good, 8:1+ is excellent. However, a business with 70% gross margins can sustain a 1.5:1 ROAS profitably while a business with 20% margins needs 5:1+ to break even. Always calculate ROAS relative to your specific margins.
Break-even ROAS is the minimum ROAS you need to cover your cost of goods. If your gross margin is 40% (you keep $0.40 for every $1 of revenue), your break-even ROAS is 1/(1-0.40) = 1.67. Any ROAS above this covers product costs but may not cover ad spend — you need ROAS above break-even ROAS + 1 to generate actual profit.
The 4 most impactful ROAS levers: (1) Improve landing page conversion rate — doubling CVR doubles revenue without increasing ad spend, (2) Improve Quality Score (Google Ads) to reduce CPCs, (3) Use Smart Bidding with Target ROAS to let Google's algorithm optimise bid allocation, (4) Cut underperforming keywords and campaigns that are dragging down your account average.
