Whatever clears your gross margin, which means the answer is a different number for every business. At a 40% margin, revenue of 2.5 times ad spend only breaks even. Quoting a ROAS target without a margin is quoting half of a ratio.

How is ROAS different from ROI?

ROAS divides revenue by ad spend and ignores every other cost. ROI works on profit and counts them all. A campaign can have an excellent ROAS and lose money, which is the most common way advertising reporting flatters itself.

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ROAS Calculator

Return on ad spend, plus the break-even ROAS your margin actually requires. A 4× ROAS is a loss at a 20% margin.

Also called: return on ad spend calculator, ad revenue ratio.

ROAS

4×. Every unit of ad spend returned 4 of revenue. On a 25% margin the break-even ROAS is 4×.

ROAS as a percentage

400%

Break-even ROAS at your margin

How this is calculated

Method and background

How this is calculated

Revenue over spend. The number that matters is not ROAS itself but ROAS against your break-even, which is one divided by gross margin. At a 25% margin you need 4× just to stand still, so a campaign at 3.5× is destroying money while looking healthy.

roas = revenue / ad_spend; breakeven = 1 / gross_margin

R: Revenue attributed to the campaign (currency)
S: Ad spend (currency)
GM: Gross margin as a decimal (decimal)

Frequently asked questions

What is a good ROAS?: Whatever clears your gross margin, which means the answer is a different number for every business. At a 40% margin, revenue of 2.5 times ad spend only breaks even. Quoting a ROAS target without a margin is quoting half of a ratio.
How is ROAS different from ROI?: ROAS divides revenue by ad spend and ignores every other cost. ROI works on profit and counts them all. A campaign can have an excellent ROAS and lose money, which is the most common way advertising reporting flatters itself.