ROAS Calculator

ROAS stands for return on ad spend.

The metric is extremely important to businesses who use paid ads as a strategy since it can help them understand how much return they generate in comparison to how much they spend on ads.

You can calculate ROAS manually with the ROAS formula mentioned below, or you can use a free ROAS calculator like the one we provide!

The ROAS formula helps you determine if you made a profit after deducting your ad spend from the amount you earned. If you made any money on your ad, you’ll have a positive ROAS percentage, but that doesn’t necessarily mean that you made a profit from your ad campaign.

For example, if you made a $200 sale on an ad, and you spent $300 on the ad, your ROAS would be 67%. Initially, you might be satisfied with that number, but in reality, you didn’t actually make a profit. In fact, you lost $100.

Do you want to calculate ROAS percentage manually? If so, check out the ROAS formula below!

When you work through the ROAS formula, you’ll end up with a ROAS percentage. This percentage expresses how much money you earn from ads in relation to how much money you spend on ads.

Pinning down a “good” ROAS is difficult, but in general, you want to have a ROAS that is over 100%. If you have a ROAS of 100%, you break even with your ad spend and your ad return.

So what are the benefits of using a return on ad spend calculator?

There are a few!

1. You’ll gain insight into the health of your ad campaign
Just like a person needs treatment when they’re sick, your ad campaign needs treatment if it’s not producing desirable results. When we cough or have a fever, we know it’s one of the first signs of illness. With ineffective ad campaigns, the first sign of “illness” is a low ROAS, or like we said before, a ROAS that is less than 100%.

By diving into important ad campaign metrics like how much money your ads generate and how much you spend on ads, you’ll be able to calculate ROAS percentage and gauge the health of your ad campaign overall.

If your calculated ROAS percentage is less than 100%, it’s time to rethink your campaign. If it’s more than 100%, keep doing what you’re doing, but don’t let off the gas.

2. It forces you to be aware
You can’t use a return on ad spend calculator without important ad campaign metrics.

When you use a ROAS calculator, you’ll be forced to dig up overlooked or ignored campaign metrics. For example, you might continually spend the same amount on your ad campaign every month but never actually stop to see what you’re earning from that campaign.

One of the most important and long-lasting benefits of using a ROAS calculator is it forces you to be aware of important ad campaign metrics like spend vs. revenue.

3. You don’t have to worry about miscalculations
A free ROAS calculator like the one we provide is a great way to ensure that you don’t miscalculate a metric as important as ROAS.

With so many numbers involved, it’s easy to miscalculate, and if you do, you’ll end up with a misjudged ROAS and a misled ad campaign.

When you use a return on ad spend calculator, you guarantee an accurate result every time.

There are a number of factors that influence your ROAS including:

Targeting
Targeting allows you to reach your most qualified audience with your ads, and if you don’t do it properly, you could be throwing your ad budget — and a good ROAS — out the window.

pixelcrayons is a digital marketing agency that specializes in creating ad campaigns that produce the highest return possible.

We can help you target the right keywords and audience with your ads, set a reasonable bidding price, and more.

Before you can calculate your break-even ROAS, you need to know your average profit margin percentage. To calculate your average profit margin, use this formula:

For example, if your average profit margin percentage is 50%, your break-even ROAS is 200% using the formula above. As a result, you’ll break even at 200% ROAS. If your ROAS is below this number, you’re losing money on your ads.