Free tool
ROAS, and the ROAS you need.
Enter what the ads made and what they cost. Add your margin to see where they start paying.
$
$
%
- 5.00
- ROAS
- 2.50
- Break-even ROAS
- $1,000
- Profit after ads
The arithmetic
ROAS = revenue ÷ ad spend.
Break-even ROAS = 1 ÷ gross margin.
Profit after ads = revenue × gross margin − ad spend.
Questions
How do you calculate ROAS?
Revenue from the ads divided by what you spent on them. $5,000 from $1,000 of ads is a ROAS of 5.
What is break-even ROAS?
The ROAS at which the ads pay for themselves and nothing more: 1 divided by your gross margin. At a 40% margin that is 2.5.
Is a ROAS of 2 good?
It depends on your margin. At a 40% margin you need 2.5 to break even, so a 2 loses money. At 60% you need 1.67, so a 2 makes money.
Does this include fees?
Only what you enter. On Greenset, + 2% of the money that pays for your ads, so add it to your spend.