ROAS Calculator

Revenue divided by ad spend tells you how much money came back, not whether you kept any. A 3× ROAS sounds healthy until you learn the product carries a 25% gross margin. In that case every $1 of spend produces $3 of revenue and $0.75 of gross profit, a 25 cent loss before you pay anyone. The number that separates a good campaign from an expensive one is break-even ROAS, which is 1 divided by gross margin.

From there, a target is straightforward. Decide how much profit you want on each dollar of spend, add 1, and divide by margin. Wanting 20 cents of profit per dollar at 50% margin gives a target of 2.40×. This is the figure to feed into a target ROAS bid strategy, and it changes every time margin changes, which is why a single company-wide ROAS target rarely survives contact with a real product catalog.

Two things this tool cannot fix. Attributed revenue is only as honest as the attribution model behind it, and platform-reported ROAS is routinely higher than what incrementality tests show. And ROAS says nothing about volume: a 6× ROAS on $500 of spend is worth less to the business than a 3× ROAS on $50,000. Judge the return and the scale together.