Advertising efficiency
ROAS Calculator
Work out return on ad spend, then check it against your break-even ROAS so you know whether the campaign actually made money.
Quick answer: ROAS = attributed revenue ÷ ad spend. $12,000 of revenue from $3,000 of ads is a 4.00x ROAS. With a 60% gross margin, break-even is 1.67x — so 4.00x is profitable.
Calculate ROAS
Enter revenue and ad spend, or switch mode to solve for the spend or revenue you need.
Result
Enter revenue and ad spend to calculate ROAS.
How to calculate ROAS
ROAS answers one question: for every dollar of ad spend, how many dollars of revenue came back? It is reported as a ratio (4.00x) or a percentage (400%), and the two mean the same thing.
| Revenue | Ad spend | Calculation | ROAS |
|---|---|---|---|
| $12,000 | $3,000 | $12,000 ÷ $3,000 | 4.00x (400%) |
| $45,000 | $15,000 | $45,000 ÷ $15,000 | 3.00x (300%) |
| $8,400 | $6,000 | $8,400 ÷ $6,000 | 1.40x (140%) |
Rearranged, the same formula sets targets: revenue needed = ad spend × target ROAS and ad spend allowed = revenue target ÷ target ROAS.
ROAS is not profit — find your break-even first
A 4.00x ROAS sounds healthy until you subtract what the product cost. The number that decides profitability is break-even ROAS, which depends only on gross margin:
| Gross margin | Break-even ROAS | What a 4.00x ROAS means |
|---|---|---|
| 20% | 5.00x | Losing money on every sale |
| 30% | 3.33x | Thin profit |
| 40% | 2.50x | Clearly profitable |
| 50% | 2.00x | Clearly profitable |
| 60% | 1.67x | Healthy margin on every order |
| 70% | 1.43x | Strong margin, room to scale |
This is why two brands can look at the same 3.00x ROAS and reach opposite conclusions. A low-margin retailer needs 5.00x to break even; a 60%-margin brand makes money above 1.67x. Always calculate break-even before judging a campaign, and remember it ignores fixed costs, shipping, returns and payment fees — a conservative target adds a buffer on top.
ROAS vs ROI
ROAS measures media efficiency only. ROI measures profit against every cost involved. Worked example with a 60% gross margin: $12,000 of revenue costs $4,800 in goods, so gross profit is $7,200. After $3,000 of ad spend, profit is $4,200 on $7,800 of total cost — an ROI of 53.8%, on top of a 4.00x ROAS. Both numbers are correct; they answer different questions.
ROAS benchmarks for 2026
Reported medians vary by source and vertical, so treat these as context rather than a pass mark:
| Segment | Reported ROAS |
|---|---|
| Ecommerce overall (median) | ~2.0x – 2.9x |
| Apparel & accessories | ~3.9x |
| Arts & entertainment | ~3.2x |
| Beauty & personal care | ~2.2x |
| Q4 peak (holiday season) | ~4x – 5x |
Seasonality is large. Ecommerce ROAS in the US typically peaks around Black Friday and the holiday period, drops through January and February as demand resets, then settles through spring and summer. Comparing December with February without adjusting for that cycle is the fastest way to make a wrong budget decision.
How to improve ROAS
- Fix the cheapest lever first: conversion rate. At the same traffic cost, doubling conversion rate doubles ROAS. Test the offer, price presentation, shipping terms and checkout friction before touching bids.
- Cut the bottom of the account. Find placements, audiences and keywords with spend and no revenue, and exclude them.
- Raise average order value. Bundles, thresholds for free shipping and cross-sells raise revenue per conversion without raising ad cost.
- Use margin-aware targets. Set campaign targets from break-even ROAS, not from a round number someone liked.
- Check attribution before you optimise. Platform-reported ROAS is usually more generous than a blended or post-purchase-survey view. Pick one definition and use it consistently.
- Refresh creative on a schedule. Falling CTR with rising frequency drags ROAS down before spend data shows the problem.
Frequently asked questions
What is a good ROAS?
It depends on your margin. Reported ecommerce medians sit near 2x–3x, but the only meaningful test is your break-even ROAS: 1 divided by gross margin. If your margin is 30%, anything above 3.33x is profit; if it is 60%, anything above 1.67x is profit.
How do I calculate ROAS?
Divide the revenue attributed to ads by the ad spend. $12,000 of revenue from $3,000 of ads is a 4.00x ROAS, also written as 400%.
Is ROAS the same as ROI?
No. ROAS compares revenue with ad spend only. ROI compares profit with all costs, including product cost, fees and overhead. A campaign can have a 4.00x ROAS and still lose money if margins are thin.
What is break-even ROAS?
Break-even ROAS is 1 divided by your gross margin. With a 40% gross margin, break-even is 2.50x: below that you lose money on each order, above it you profit.
Should I use platform-reported ROAS?
Use it for in-platform optimisation, but verify against blended revenue or a post-purchase survey. Platform attribution commonly claims credit for sales that would have happened anyway.
What ROAS should I target on Meta or Google Ads?
Set it from your margin, then add a buffer: a common approach is break-even ROAS plus 20–30% to cover returns, fees and fixed costs. Platform averages are a poor substitute for your own break-even number.
Does ROAS include returns and refunds?
Usually not, unless you feed net revenue into the calculation. For apparel and other high-return categories, subtract expected returns before calculating ROAS or you will systematically overstate performance.
Why did my ROAS drop in January?
US ecommerce ROAS peaks in Q4 and resets in January and February as post-holiday demand falls. It is a seasonal pattern rather than a campaign failure — compare year over year, not month over month.