Calculate Your Return on Ad Spend

How do you calculate ROAS?

ROAS is the revenue generated by your ads divided by your ad spend. The tool also returns three related numbers: CPA is ad spend divided by conversions, profit is revenue minus ad spend, and profit margin is (revenue − ad spend) ÷ revenue × 100.

You enter ad spend, revenue, number of conversions and average order value. When you change conversions or AOV, revenue is recalculated as conversions × AOV; you can still overwrite revenue by hand. You can switch between USD and TWD, and the conversion rate is fixed at 1:32 in the code.

Example: $10,000 of monthly ad spend brings 150 conversions and $45,000 in revenue. ROAS = 45,000 ÷ 10,000 = 4.5x. CPA = 10,000 ÷ 150 ≈ $67. Profit is $35,000, and profit margin is 35,000 ÷ 45,000 × 100 ≈ 77.8%.

How should you read your ROAS result?

The tool sorts ROAS into four bands: below 2x, 2 to 4x, 4 to 8x, and 8x or higher, labeled Poor, Average, Good and Excellent. These are the tool's built-in cutoffs, so the 4.5x example above reads as Good. The gauge bar tops out at 12x, so any ROAS above 12x shows as a full bar.

Below the gauge, the tool compares your ROAS with its built-in industry benchmark ranges: iGaming 8x to 12x, Crypto 4x to 6x, E-Commerce 3x to 5x and SaaS B2B 5x to 8x. If your ROAS is at or above the lower end of a range, it shows as above benchmark; otherwise it shows as below. A 4.5x ROAS clears the E-Commerce and Crypto minimums but falls short of iGaming and SaaS B2B.

Keep in mind that profit here only subtracts ad spend. It does not include cost of goods, payment fees or staff time, so a healthy ROAS does not by itself mean the business is profitable.

FAQ

What formula does the ROAS calculator use?

ROAS = revenue from ads ÷ ad spend. Spending $10,000 to generate $45,000 in revenue gives a ROAS of 4.5x.

What counts as a good ROAS in this tool?

Under the tool's built-in cutoffs, below 2x is Poor, 2 to 4x is Average, 4 to 8x is Good and 8x or more is Excellent. What is acceptable for you still depends on your margins.

Is the profit figure net profit?

No. The tool's profit is revenue minus ad spend only, with no cost of goods, shipping, fees or overhead deducted, so it overstates true net profit.

Why does revenue change when I edit AOV?

When you change conversions or average order value, the tool sets revenue to conversions × AOV. If you have an actual revenue figure, enter it last.

Where do the industry benchmark ranges come from?

They are reference ranges built into the tool (iGaming 8 to 12x, Crypto 4 to 6x, E-Commerce 3 to 5x, SaaS B2B 5 to 8x). The page notes they are for reference only and real results vary by industry, creative and market.