Return On Ad Spend (ROAS) Calculator

Calculate the Return On Ad Spend (ROAS) of an ad campaign. The simplest calculation is Revenue / Ad Cost. Or, for a more advanced calculation, estimate ROAS for a future campaign based on campaign performance metrics.

ROAS Calculator Instructions

There are two ways to approach this calculator:

1) Calculate the ROAS of a completed ad campaign

Calculate what the Return on Ad Spend is for a past campaign.

• At the top of the calculator, select the tab "Calculate past ROAS"
• Enter the "Ad Revenue"
• Enter the "Ad Spend"

You'll see the ROAS of the campaign (%).  

2) Estimate the ROAS of future ad campaign

Estimate what the Return on Ad Spend will be for a future campaign, based on expected ad CPC and conversion rates.

• At the top of the calculator, select the tab "Estimate future ROAS"
• Enter the amount you will spend on the ad
• Enter the estimated Cost-Per-Click (CPC)
• Enter the site conversion rate (assuming you are driving clicks to your website)
• Enter your lead-to-customer conversion rate, or the percentage of customers you expect to convert from leads.
  • If your sales are made directly on your website (eg ecommerce), you may enter 100% here
• Enter your average customer value, or the average revenue you expect to get from a customer

You'll see the estimated ROAS of the campaign (%).

Return on Ad Spend (ROAS) Formula

ROAS is calculated by taking the total revenue returned on an ad ($) and dividing it by the total cost of the ad.

Example Return on Ad Spend (ROAS) Calculation

We are given these performance stats of an ad campaign:

• Revenue generated from ad = $8,000
• Amount spent on ad = $2,000

We want to know the ROAS of the ad campaign:

• We take the revenue generated by the ad and divide that by the amount spent on the ad
• The ROAS for this ad is then ($8,000 / $2,000) = 400%

What is a Good ROAS?

The PPC ROAS average for Google Ads is 200%. However,what is considered a "good ROAS" depends on your own business.

ROAS does not take into account other non-advertising related costs, like the costs of good sold (for products) or the operating expenses to support a customer (for service businesses). High profit margin businesses may be able to afford a lower ROAS while low profit margin businesses may require a higher ROAS.

ROAS vs ROI

Although sometimes used interchangeably, Return on Ad Spend (ROAS) is significantly different than Return on Investment (ROI).

ROAS is an ad metric specifically used to evaluate the effectiveness of ad campaigns. It takes into account only the revenue generated by the ad and the costs associated with the ad. ROAS is calculated by revenue divided by costs.

ROI is a broader metric that can be used in decisions involving some kind of financial investment, for example investing in the stock market, a home purchase or a collectible. ROI also considers profit rather than revenue as the return. ROI is calculated by profit divided by cost.

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