ROAS Calculator
Calculate ROAS, ROI, profit, and POAS from your revenue and ad spend — and see how it compares to industry benchmarks.
Optional — add your margin to also calculate POAS
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What is ROAS (return on ad spend)?
Return on ad spend (ROAS) measures the revenue generated for every dollar spent on advertising. It's calculated as ROAS = (Revenue ÷ Ad Spend) × 100, expressed as a percentage. A ROAS of 300% means every $1 spent on ads returned $3 in revenue. ROAS is a revenue-based metric — it doesn't account for product costs, which is why POAS (profit on ad spend) is often used alongside it for a profit-based view.
How to use the ROAS Calculator
Enter the revenue generated by a campaign and the ad spend that produced it to get ROAS, ROI, and profit instantly. If you know your profit margin, enter it to also see POAS — the return on ad spend after accounting for the cost of goods sold. Your last 5 calculations are saved automatically so you can compare campaigns or time periods without re-entering numbers.
What's a 'good' ROAS?
A 'good' ROAS depends heavily on the business model and margins. E-commerce stores often target around 350% (a $3.50 return for every $1 spent) to stay profitable after product and fulfillment costs. SaaS businesses, with high margins and recurring revenue, can profitably sustain ROAS around 500% or higher. Lead generation businesses, where each lead still needs to be converted into a sale, often target a more conservative 200%. Always interpret ROAS alongside your margins — a high-ROAS campaign can still be unprofitable if margins are thin, which is what POAS is designed to reveal.
FAQ
How is ROAS calculated?
ROAS is calculated as (Revenue ÷ Ad Spend) × 100. For example, $10,000 in revenue from $2,500 in ad spend gives a ROAS of (10000 ÷ 2500) × 100 = 400%, meaning every $1 spent returned $4 in revenue.
What's the difference between ROAS and ROI?
ROAS measures revenue relative to ad spend (Revenue ÷ Ad Spend × 100), while ROI measures profit relative to ad spend ((Revenue − Ad Spend) ÷ Ad Spend × 100). A ROAS of 400% corresponds to an ROI of 300% — ROI nets out the original ad spend to show the actual return on investment.
What is POAS and why does it matter?
POAS (profit on ad spend) measures profit — after product cost — relative to ad spend. Unlike ROAS, which is based on gross revenue, POAS accounts for your profit margin: POAS = ((Revenue × Margin%) − Ad Spend) ÷ Ad Spend × 100. A campaign can have a high ROAS but a low or negative POAS if margins are thin, which is why many advertisers optimize bidding toward POAS instead of ROAS.
What is a good ROAS for e-commerce?
A commonly cited e-commerce benchmark is around 350% (a $3.50 return for every $1 spent), though the breakeven ROAS depends entirely on your margins, shipping costs, and overhead. A store with 50% margins needs a much lower ROAS to break even than one with 15% margins.
Why is my ROAS high but my business isn't profitable?
ROAS only measures revenue, not profit. If your product margins are low, the cost of goods sold and fulfillment can eat up most or all of the revenue an ad generates — even at a ROAS of 300% or more. Enter your profit margin to calculate POAS, which reflects actual profitability rather than gross revenue.
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