ROAS Calculator

Formula

ROAS = revenue attributed to advertising ÷ advertising cost.

Worked example

With Revenue attributed to ads: 12000 currency units, Advertising spend: 3000 currency units, return on ad spend is 4 ×.

Inputs and calculation

Divide tracked revenue attributed to the campaign by the amount spent buying its ads. A ratio of four means four units of attributed revenue for every one unit of ad spend. The displayed relationship is ROAS = revenue attributed to advertising ÷ advertising cost. Keep the fields' displayed units attached when reproducing this relationship by hand.

Worked numerical example

For example, enter revenue attributed to ads 12,000 currency units, advertising spend 3,000 currency units. Those inputs produce return on ad spend of 4 ×. The same values also give revenue per 100 ad-spend units 400 currency units.

Holding the other example values fixed, change revenue attributed to ads from 12,000 to 13,200 currency units. The main output becomes 4.4 ×. This comparison isolates the effect of that one input.

How to read and use the result

ROAS is a revenue multiple, not net profit or investment return after all expenses. Product costs and fulfilment can leave little margin even when the multiple looks high. Monitor advertising efficiency before examining contribution margin and customer lifetime value.

Practical context

When 3,000 of ad spend is associated with 12,000 of revenue, ROAS is four times. If gross margin is only 20%, that revenue creates 2,400 of gross profit before other costs, less than the ads cost; a four-times ROAS would not be profitable under those assumptions. Conversely, repeat purchases can make a campaign valuable beyond the first order.

Assumptions and scope

Revenue attribution and ad cost cover the same campaign and observation window. The attribution model is a choice, not something this arithmetic can verify. Replace the example defaults with measured inputs for your situation and account separately for factors outside these fields.

Checks and common mistakes

Avoid comparing campaigns that assign sales to ads by different attribution windows or rules. Include discounts and refunds consistently in the revenue figure.

Common questions

What should I verify before using the ROAS Calculator result?

State the attribution window and whether revenue includes refunds or taxes before comparing campaign ratios. A platform can credit a sale to a viewed ad while another platform credits the same sale to a later click. Summing the two attributed revenues can double-count business revenue. Compare ad reports against actual orders before using ROAS in a budget.