Ad ROI Calculator
See what each lead costs (CPL) and each paying customer costs (CPA), compare against customer value — then back-calculate the ad spend you need to break even. Rough, but enough to steer by.
Unit economics
Value $150 vs CPA $89 — below value = profitable
This budget gets you
Rough estimate assuming stable conversion and output scaling ~linearly with spend. Actuals vary with creative, season, auction, and retention. ROAS = customer value ÷ CPA.
How do you convert CPL into CPA?
CPA equals CPL divided by your lead-to-paying conversion rate. The tool uses that to get the cost of each paying customer, then checks unit economics with ROAS = customer value ÷ CPA. A ROAS of 1 or more means each customer's value covers what it cost to acquire them; below 1 is flagged in red.
You provide four numbers: ad budget (or revenue target), customer value, CPL (slider from $1 to $50) and lead-to-paying rate (slider from 1% to 50%). These are your own assumptions; the tool has no built-in industry benchmark.
Example: CPL $8, conversion rate 9%, customer value $150. CPA = 8 ÷ 0.09 ≈ $88.89, and ROAS = 150 ÷ 88.89 ≈ 1.69×.
What is the difference between forward and reverse mode?
Forward mode starts from a budget and estimates the return; reverse mode starts from a revenue target and estimates the ad spend needed. Forward: leads = budget ÷ CPL, paying customers = leads × conversion rate, revenue = customers × customer value, gross profit = revenue − budget. Reverse: customers needed = revenue target ÷ customer value, leads needed = customers ÷ conversion rate, ad spend needed = customers × CPA.
With the same assumptions, a $5,000 budget in forward mode gives 625 leads, about 56 paying customers, about $8,438 in revenue and about $3,438 in gross profit. A $100,000 revenue target in reverse mode needs about 667 customers, about 7,407 leads and about $59,259 in ad spend.
How should you read the uncertainty band?
When you turn it on, the tool runs 3,000 Monte Carlo simulations and shows the range the main result falls in 80% of the time. Each run multiplies CPL, conversion rate and customer value by a separate log-normal random factor (σ = 0.35 in the code), then takes the 10th and 90th percentiles as the bounds. The band reflects noise in your inputs, not the real market, and the tool assumes output grows roughly linearly with spend.
FAQ
- How does the tool calculate CPA?
- The tool uses CPA = CPL ÷ lead-to-paying conversion rate. With an $8 CPL and a 9% conversion rate, CPA is about $88.89.
- What does a ROAS below 1 mean here?
- In this tool ROAS = customer value ÷ CPA, so below 1 means acquiring a paying customer costs more than the value that customer brings in, and each customer loses money.
- What costs does gross profit include?
- Only ad spend. Gross profit in this tool is revenue minus the ad budget (or revenue target minus ad spend needed in reverse mode), with no cost of goods, fees or staff costs.
- How is the 80% band calculated?
- The tool runs 3,000 simulations, multiplying CPL, conversion rate and customer value by log-normal random factors with σ = 0.35, then reports the 10th to 90th percentile of the results.
- Does this simulator include industry benchmarks?
- No. You enter CPL, conversion rate and customer value yourself, so the output is only as useful as the recent real numbers from your own account.