Calculate your Return on Ad Spend (ROAS) with this free online calculator. Simply enter the required data points and click calculate. You’ll get an instant overview of your campaign ROAS as a result.
What is ROAS (Return on Ad Spend)?
ROAS stands for Return on Ad Spend. It is a metric to describe how much revenue you get in return for your advertising budget. If your ROAS is 800%, it means that in return for the amount of money you spend on ads you generate 8x its revenue.
How to calculate ROAS
Simply follow these four easy steps to calculate your Return on Ad Spend:
- Find out the total sales your ads generated, e.g.,
$100. - Find out your total spend on ads, e.g.,
$25. - Divide the total sales by your ad spend:
$100 ÷ $25 = 4. - Express it as a percentage:
4 * 100 = 400%.
The ROAS formula
The Return on Ad Spend formula is as follows: ROAS = 100 * total ad revenue / total ad spend. If you can’t measure the direct sales revenue, you can use this formula instead: ROAS = number of ad conversions * average number of sales conversion * average sales price – total ad spend.
What is a good ROAS?
There’s no single ‘good’ ROAS and your return will differ by industry. In other words, your benchmark depends on what products you sell and who your competitors are. As a rule of thumb, your ROAS should be at a minimum of 400%, but better at 800% or above. The higher your ROAS, the better.
ROAS vs. ACoS
So what’s the difference between ROAS and ACoS? Both bring the revenue from ads and your total ad spend in relation to each other. While the ROAS reflects the ratio of your ad revenue to your ad spend, the ACoS measures the ratio of ad spend to your total ad revenue.
As such, both metrics measure each side of the same coin. Let’s say your total ad revenue is $100 and your total ad spend is $25. Your ROAS would be 400%, while your ACoS would be 25%.
If you want to learn more about ACoS (Advertising Cost of Sales), try my free ACoS calculator.