How to use the ROAS calculator
Enter what you spent on ads for the period, taken from Ads Manager or your ad platform.
Enter the revenue attributed to those ads. Use the same attribution window you normally report on, for example 7-day click and 1-day view.
Add your gross margin after product, shipping and payment fees. If you are unsure, the break-even ROAS calculator works it out from your unit costs.
Read the verdict. The calculator compares your ROAS with break-even and shows the profit or loss left after ad spend.
The ROAS formula
- ROAS=revenue from ads ÷ ad spend
- Break-even ROAS=1 ÷ gross margin
- Profit after ads=revenue × gross margin − ad spend
- ACoS=ad spend ÷ revenue from ads
- Revenue from ads
- Sales value attributed to the campaign in the period, excluding tax. Deduct refunds if they are material in your category.
- Ad spend
- Money paid to the ad platform for the same period and the same campaigns.
- Gross margin
- Share of each sale left after product cost, shipping, payment fees and other variable costs, written as a decimal (45% = 0.45).
- ACoS
- Advertising cost of sales, the inverse of ROAS expressed as a percentage. Common in Amazon advertising.
ROAS is written either as a multiple (3.12x) or as a percentage (312%). Both describe the same number.
Worked example
A store spending 2,500 in a month
- Ad spend is 2,500 and attributed revenue is 7,800.
- ROAS = 7,800 ÷ 2,500 = 3.12x.
- Gross margin is 45%, so break-even ROAS = 1 ÷ 0.45 = 2.22x.
- Profit after ads = 7,800 × 0.45 − 2,500 = 1,010.
What counts as a good ROAS
There is no universal good ROAS. A brand with 75% margins can be very profitable at 2x, while a store reselling electronics on a 20% margin needs 5x just to break even. The first benchmark that matters is your own break-even ROAS, and it follows directly from your margin.
Published 'industry average' ROAS figures deserve suspicion. They are usually self-reported, mix different attribution settings and rarely state the margins behind them. Use them as loose orientation at most, and judge campaigns against your own economics.
| Gross margin after variable costs | Break-even ROAS |
|---|---|
| 80% | 1.25x |
| 60% | 1.67x |
| 50% | 2.00x |
| 40% | 2.50x |
| 33% | 3.00x |
| 20% | 5.00x |
Platform ROAS versus real ROAS
The ROAS shown in Ads Manager is attributed revenue: purchases Meta connects to an ad within your attribution window, partly modelled when tracking is incomplete. It can overstate results by counting people who would have bought anyway, or understate them when people buy on another device or after the window closes.
Experienced media buyers usually watch two numbers. Platform ROAS guides decisions inside the ad account. Blended ROAS, often called MER (total revenue divided by total ad spend across every channel), decides whether the business is actually making money.
- Compare platform ROAS with blended revenue over the same dates before you scale.
- Keep the attribution setting fixed when you compare periods.
- Subtract refunds and cancellations when they are a meaningful share of revenue.
- Separate new-customer revenue from returning-customer revenue where you can; retargeting returning buyers flatters ROAS.
Raising ROAS without starving growth
ROAS usually falls as budgets rise, because each extra unit of spend reaches people who are less likely to buy. A rising ROAS at flat spend is good news. A rising ROAS because you cut prospecting may only mean you are harvesting demand you already created.
- Raise average order value with bundles, volume pricing or post-purchase offers; it lifts ROAS without touching the ads.
- Improve landing page conversion rate before pushing more traffic to it.
- Refresh creative when frequency climbs and CTR slides, rather than only narrowing targeting.
- Study ads that competitors keep running for months. Longevity is a reasonable signal that an ad pays for itself.
Questions and answers
How do you calculate ROAS?+
Divide the revenue attributed to your ads by what you spent on them. 6,000 in revenue from 2,000 of spend is a ROAS of 3, written as 3x or 300%.
What is a good ROAS for Facebook ads?+
A good ROAS is one comfortably above your break-even ROAS, which is 1 divided by your gross margin. With a 50% margin you break even at 2x; with a 25% margin you need 4x. Industry averages are of limited use because margins differ so much between businesses.
Is ROAS the same as ROI?+
No. ROAS compares revenue with ad spend only. ROI compares profit with the total investment, including product costs, fees and overheads. A campaign can show a 3x ROAS and still lose money if margins are thin.
What is the difference between ROAS and MER?+
ROAS usually means revenue an ad platform attributes to a campaign. MER, or marketing efficiency ratio, divides all revenue by all marketing spend for the same period. MER is less precise per campaign but harder to inflate, so many brands use it as the profitability check.
Why is my ROAS in Ads Manager different from Shopify?+
Ads Manager counts conversions inside an attribution window and models some it cannot observe directly, while Shopify records orders by its own rules or by UTM data. Different windows, time zones, refunds and cross-device journeys all create gaps. Compare trends over the same dates rather than expecting the numbers to match.
Should revenue include shipping and tax?+
Exclude tax. Most stores include what the customer pays for shipping in revenue and account for the cost of shipping inside the margin. What matters is that revenue and margin are measured on the same basis.