ROAS calculator: return on ad spend

What is ROAS (return on ad spend)?

Return on ad spend is the revenue a campaign brought in for each dollar spent on it. A ROAS of 3.6x means $3.60 of revenue per $1 of ads. It’s the most common efficiency metric in paid acquisition because it’s simple and comparable across campaigns, ad sets and platforms.

ROAS measures revenue, not profit. That’s why the number to compare it with is your break-even ROAS — the point where gross profit from the sales exactly pays for the ads. Below it, every sale the campaign drives loses money on the first purchase.

ROAS formulas

Worked example

1. A campaign spends $5,000 and drives 150 orders worth $18,000. ROAS = $18,000 ÷ $5,000 = 3.6x.
2. The product’s gross margin is 60%, so break-even ROAS = 1 ÷ 0.6 ≈ 1.67x. At 3.6x the campaign is comfortably above it.
3. CPA = $5,000 ÷ 150 ≈ $33.33. Average order value = $18,000 ÷ 150 = $120, so break-even CPA = $120 × 0.6 = $72.
4. Profit after ads = $18,000 × 0.6 − $5,000 = $5,800.

Now set margin to 25% in the calculator. Break-even ROAS jumps to 4x, the same 3.6x campaign is below it, and profit after ads turns into a $500 loss. Same campaign, same ROAS — different business.

What is a good ROAS? Benchmarks

Published “average ROAS” figures vary widely by platform, industry, attribution model and year, and most come from vendors with a view on the answer — so we don’t quote one here. The benchmark that holds for every business is your own break-even ROAS, set by your margin:

Common ROAS mistakes

• Trusting platform ROAS on its own. Ad platforms attribute conversions to their own ads, often including view-through conversions and modeled estimates. Add up ROAS across platforms and you can “earn” more revenue than you actually took in.
• Comparing ROAS with 1x. Revenue isn’t profit; compare with break-even ROAS.
• Ignoring refunds and returns. A campaign that brings high-refund customers looks great on gross revenue.
• Judging subscriptions on the first payment only. For SaaS, a 1x first-month ROAS can be very profitable if customers stay for 30 months — check with the LTV calculator.
• Mixing attribution windows. A 7-day-click ROAS and a 28-day-click ROAS aren’t comparable. Pick one window across channels.
• Optimizing ROAS until volume disappears. The highest-ROAS campaigns are often the smallest. Total profit after ads is the number to maximize.

How to measure ROAS independently with VisitTrack

VisitTrack gives you a second opinion on ad-platform ROAS: revenue attributed by your own analytics, from payments your payment provider confirmed, to the campaign of the visit that led to them.

1. Add UTM parameters to every ad link — the UTM builder makes consistent ones.
2. Connect Stripe, Paddle, Polar, Lemon Squeezy or Razorpay and pass the visitor id to checkout (revenue attribution).
3. On the Revenue tab, read revenue by campaign and by source, with refunds shown separately.
4. Divide each campaign’s revenue by its spend from the ad platform — that’s your analytics-attributed ROAS. Compare it with the platform’s number before moving budget.