How to use the ROAS calculator
Enter the revenue attributed to your advertising campaign and the advertising spend for the same campaign and reporting period. The calculator divides attributed revenue by ad spend and shows the result as a multiple, such as 5.00x.
ROAS formula
ROAS = Revenue attributed to advertising ÷ Advertising spend
Return on ad spend measures how much attributed revenue is generated for each unit of currency spent on ads. A ROAS of 4.00x means the campaign generated $4 in attributed revenue for every $1 of advertising spend.
Example: calculate a 5x ROAS
If a campaign generates $5,000 in attributed revenue and costs $1,000, divide $5,000 by $1,000. The result is 5.00x. This means attributed revenue was five times the advertising cost; it does not mean the campaign earned $4,000 in profit.
ROAS is not the same as profit
ROAS does not subtract product cost, fulfillment, marketplace commissions, payment processing, returns, payroll, or overhead. A campaign can have a high ROAS and still lose money if the underlying product margin is low. Review the ecommerce profit calculator alongside campaign performance to estimate per-order profit.
Use ROAS with context
Compare campaigns using consistent attribution settings, date ranges, and revenue definitions. Platform-reported attribution can differ between advertising channels and may include different conversion windows. Your acceptable ROAS depends on your gross margin and other variable costs, not on a universal target.
Frequently asked questions
Is a higher ROAS always better?
Not necessarily. Higher ROAS can indicate more revenue per advertising dollar, but it does not show total sales volume or profitability by itself.
What is the difference between ROAS and ROI?
ROAS compares attributed revenue with advertising spend. ROI compares the gain from an investment with its cost and can include a broader set of returns and expenses. See the ROI calculator.
Related calculators
- ACOS Calculator – express ad spend as a percentage of attributed sales.
- ROI Calculator – estimate return relative to investment cost.
- Ecommerce Profit Calculator – include product, fee, shipping, and ad costs.