ROAS (Return on Ad Spend) Calculator
Measure the effectiveness of your advertising campaigns instantly.
What is ROAS?
ROAS stands for Return on Ad Spend. It is a marketing metric that measures the amount of revenue your business earns for every dollar it spends on advertising. For digital marketers, ROAS is one of the most critical KPIs (Key Performance Indicators) because it directly links advertising costs to sales performance.
How to Calculate ROAS
The formula for ROAS is straightforward:
For example, if you spend $1,000 on Google Ads and generate $5,000 in sales, your ROAS is 5:1. This means for every $1 you spent, you earned $5.
A boutique clothing store runs a Facebook Ad campaign. They spend $2,500 on ads over one month. Through tracking pixels, they determine those ads resulted in $12,500 in revenue.
Calculation: $12,500 / $2,500 = 5.0x ROAS (or 500%).
What is a Good ROAS?
While a "good" ROAS depends on your profit margins, industry, and operating expenses, a common benchmark is 4:1 (400%). However, companies with high overhead may need a 10:1 ROAS to remain profitable, while companies with very low costs might thrive at 3:1.
Why ROAS Matters for SEO and PPC
Understanding your ROAS allows you to identify which keywords, audiences, and platforms are driving the highest value. By calculating ROAS regularly, you can shift budget from underperforming campaigns to high-performing ones, maximizing your overall marketing ROI.