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ROAS Calculator — Return on Ad Spend
ROAS (return on ad spend) tells you how much revenue each advertising dollar brings back, and it is not the same as marketing ROI — mixing the two is the classic marketer's error. ROAS is a gross ratio: revenue / ad spend. Spend $5,000 to generate $20,000 in revenue and your ROAS is 4:1, or 400%. Marketing ROI is a net figure: (revenue − ad spend) / ad spend, which for the same numbers is (20,000 − 5,000) / 5,000 = 300%. ROAS counts the ad cost inside the return; marketing ROI strips it out — so a 400% ROAS is a 300% ROI, always exactly 100 percentage points apart. Enter your ad spend and the revenue it produced above to get both, correctly labelled. Free, no login.
ROAS = revenue / ad spend (a gross ratio, e.g. 4:1 or 400%)
- Marketing ROI = (revenue − ad spend) / ad spend (net of the ad cost)
- Worked example — $5,000 ad spend → $20,000 revenue: ROAS = 4:1 (400%)
- Worked example — same figures: marketing ROI = (20,000 − 5,000)/5,000 = 300%
- ROAS and marketing ROI are always 100 percentage points apart (400% ROAS = 300% ROI)
- Break-even ROAS given a gross margin m is 1 / m — below it the ads lose money
- ROAS includes the ad cost in the numerator; marketing ROI removes it — do not conflate them
Frequently asked questions
What is ROAS and how is it calculated?
ROAS (return on ad spend) is revenue divided by advertising spend. If a campaign costs $5,000 and generates $20,000 in revenue, the ROAS is 20,000 / 5,000 = 4, usually written as 4:1 or 400%. It measures the gross revenue return on each advertising dollar and is the headline efficiency metric for paid marketing. Note that ROAS uses revenue, not profit — it does not account for the cost of goods behind that revenue, so a high ROAS on a low-margin product can still be unprofitable.
What is the difference between ROAS and marketing ROI?
ROAS is a gross ratio — revenue / ad spend — that keeps the ad cost inside the return. Marketing ROI is net — (revenue − ad spend) / ad spend — subtracting the ad cost first. For $5,000 of spend returning $20,000, ROAS is 400% while marketing ROI is (20,000 − 5,000) / 5,000 = 300%. They are always exactly 100 percentage points apart, because ROI simply removes the one unit of spend that ROAS still counts. Marketers who quote "400% ROI" when they mean 400% ROAS overstate the net return by that 100 points.
What is a break-even ROAS?
Break-even ROAS is the point where the revenue from ads exactly covers both the ad spend and the cost of the goods sold. Given a gross margin m (as a fraction of revenue), break-even ROAS = 1 / m. For a 25% gross-margin product, break-even ROAS is 1 / 0.25 = 4:1 — you need $4 of revenue per $1 of ad spend just to break even, because only 25 cents of each revenue dollar is margin available to pay for the ad. Any ROAS above 1 / m is profitable; below it, the campaign loses money despite a positive ROAS.