ROAS Calculator
ROAS is revenue divided by ad spend. Spend $5,000 and earn $20,000 back and your ROAS is 4.0, or 400% — four dollars returned per dollar spent. Anything above 1.0 returns more than it costs, but the ROAS you actually need depends on your margin, not on a universal benchmark.
Enter your numbers
Everything paid to the ad platform in the period.
Revenue you can attribute to the same campaigns and the same period.
$4.00 back for every $1.00 spent on ads.
Not true profit — this ignores cost of goods, labour and fees.
On ad spend alone, at a ROAS of 1.0.
How to use this calculator
Put the amount you paid the ad platform in the first box and the revenue you can trace back to those campaigns in the second. Both numbers have to cover the same time window and the same campaigns, or the ratio describes something that does not exist. The result updates as you type.
If you sell offline — a contractor, a clinic, anything closed in person — use revenue from signed jobs recorded in your CRM, not the conversion value the ad platform reports. The platform sees a form fill; it has no idea whether the job was won.
A worked example
A remodeler spends $5,000 on Meta in a month. Those campaigns produce jobs worth $20,000 in signed contracts. ROAS is 20,000 ÷ 5,000 = 4.0x, or 400%. Revenue minus ad spend is $15,000.
That looks strong until margin enters the picture. If the remodeler keeps 25 cents of gross profit on every revenue dollar, those jobs produced $5,000 of gross profit against $5,000 of ad spend — exactly break-even, before anyone is paid to manage the account. Same 4x ROAS, completely different verdict.
Working out your own break-even ROAS
Divide 1 by your gross margin expressed as a decimal. At a 25% margin, 1 ÷ 0.25 = 4.0, so 4x is where ad spend starts paying for itself. At 50%, break-even is 2x. At 15%, it is 6.7x. This one calculation is worth more than any published benchmark, because it is the only version of the number that reflects your business.
Typical ranges do exist — ecommerce accounts often target somewhere in the 2x to 4x band, and high-ticket service businesses frequently run profitably at 5x or more — but treat those as loose context rather than targets. A business with unusual margins or long repeat-purchase cycles can sit far outside them and be doing fine.
Where ROAS misleads people
- It ignores everything except media cost. Agency fees, creative production, software and cost of delivery are all invisible to it.
- It rises when you spend less. The easiest audiences convert first, so shrinking a budget usually improves the ratio while shrinking total profit.
- It has no view of lifetime value. A channel at 1.5x that produces customers who buy again for three years can beat a channel at 6x that produces one-time buyers.
- Platform attribution flatters it. Reported ROAS and bookkeeping ROAS rarely match. Reconcile monthly.
For contractors and home-service businesses
ROAS is a blunt instrument when the sale happens at a kitchen table weeks after the click. Ad spend converts into a lead, a lead into an appointment, an appointment into someone who actually shows up, and only then into a signed job. Each of those steps leaks, and a single ROAS figure hides all of them.
If that describes your business, the cost per booked job calculator breaks the same spend down across every stage of the funnel and shows which one is doing the damage. More on the mechanics in how to get more roofing leads and why follow-up speed decides your show rate.
Common questions
What is a good ROAS?
There is no universal good ROAS, because the number that makes money depends entirely on gross margin. A business keeping 20 cents of every revenue dollar needs roughly 5x just to break even on the ad spend, while a business keeping 60 cents breaks even near 1.7x. Work out your own break-even first — gross margin divided into 1 — and judge every campaign against that number rather than an industry average.
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend only. ROI compares profit to total cost, which includes ad spend plus cost of goods, labour, software and management fees. A campaign can post a 4x ROAS and still lose money once delivery costs and agency fees are counted, which is why ROAS is a channel efficiency metric rather than a profitability metric.
How do you calculate ROAS?
Divide revenue attributed to the campaign by the amount spent on that campaign. Five thousand dollars of spend returning twenty thousand dollars of revenue is a ROAS of 4.0, usually written as 4x or 400%. Keep the numerator and denominator on the same time window and the same set of campaigns, or the ratio describes nothing real.
Should ROAS use revenue or profit?
The standard definition uses revenue, and that is what ad platforms report. Some businesses prefer a profit-based version, sometimes called POAS, which substitutes gross profit for revenue and gives a number that is directly comparable to a break-even of 1.0. Either is defensible as long as everyone reading the report knows which one is on the page.
Why does the ROAS in my ad account differ from the one in my books?
Ad platforms count conversions using their own attribution windows and their own view of which click or impression deserves credit, and they report revenue at the moment of conversion. Accounting software counts money that actually arrived, net of refunds, cancellations and jobs that never closed. Platform-reported ROAS is almost always the more flattering of the two, so treat it as a directional signal and reconcile against real revenue monthly.
Does ROAS work for businesses that sell offline?
It works, but only if revenue is fed back from wherever the sale is actually recorded. For a contractor or any business closing deals in person, the ad platform sees a form fill or a phone call and has no idea whether a job was signed. The fix is to track leads through to closed revenue in a CRM and calculate ROAS from that, rather than reading the number the platform displays.
Is a higher ROAS always better?
No. ROAS usually rises as budget falls, because the cheapest and most obvious audiences convert first. A campaign at 12x on a small budget may be leaving far more total profit on the table than the same campaign at 4x on ten times the spend. Optimise for total profit at an acceptable ROAS, not for the highest possible ratio.
How often should ROAS be reviewed?
Weekly for direction, monthly for decisions. Daily ROAS on anything but very high volume is mostly noise, because a single large sale can swing the ratio dramatically. Give a campaign enough conversions to be statistically meaningful before judging it, and change one variable at a time so the movement can be attributed to something.
Keep going
Track spend all the way through leads, appointments, show rate and closed jobs — and see exactly which stage is costing you.
Free tool Break-Even ROAS CalculatorThe ROAS you actually need to cover media at your cost per order, rather than a benchmark someone else picked.
Free tool Marketing ROI CalculatorThe same spend expressed as return on investment: net profit and payback multiple, negative returns included.
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