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Paid media maths

ROAS Calculator Free

ROAS on its own does not tell you if you made money. This adds your margin, so you see the break-even line and the profit underneath it.

How it works

01

ROAS is revenue divided by spend

It measures efficiency, not profit. A 4x ROAS on a 20% margin loses money, a 2x ROAS on a 70% margin makes it.

02

Break-even ROAS is 1 divided by margin

At 55% gross margin you need 1.82x before the media cost is paid back. Below that line every extra AED of spend widens the loss.

03

Read it at the adset level

Ad level ROAS is noisy and splits conversions across creatives. Judge the adset, then cut or scale the creative inside it.

Break-even ROAS by gross margin

The only number that matters is the one your own margin sets. Find your margin, that is the line every campaign has to clear before it is worth scaling.

Gross marginBreak-even ROASWhat it means at 10,000 spend
20%5.00xYou need 50,000 in revenue just to cover the media.
30%3.33xYou need 33,300 in revenue before a single unit of profit.
40%2.50xYou need 25,000 in revenue to pay the media back.
50%2.00xYou need 20,000 in revenue to pay the media back.
60%1.67xYou need 16,700 in revenue to pay the media back.
70%1.43xYou need 14,300 in revenue to pay the media back.

Questions

What is a good ROAS?
There is no universal number. A good ROAS is one comfortably above your break-even ROAS, and break-even is set by your gross margin. At 30% margin you break even at 3.33x, at 70% margin you break even at 1.43x. Compare your result to your own break-even line, not to a figure from another advertiser.
Should revenue include VAT, shipping and discounts?
Use net revenue, so after VAT, after discount codes and after refunds. Then put shipping cost, payment fees and cost of goods into the gross margin percent. If a cost sits in neither field, the profit line will read higher than reality.
Why does platform ROAS differ from my store numbers?
Attribution windows, view-through conversions and modelled conversions all inflate platform reported revenue, and two platforms can claim the same order. Use this calculator on blended numbers as well, total ad spend against total store revenue, and treat the gap between the two as your attribution tax.
What is the difference between ROAS and MER?
ROAS is platform reported revenue divided by that platform's spend, so it is a channel metric and it double counts across channels. MER, marketing efficiency ratio, is total store revenue divided by total marketing spend, so it cannot be gamed by attribution. Run this calculator twice, once on platform numbers to judge the campaign and once on blended numbers to judge the business.

Next step

The maths is the easy part. The landing page is where the ROAS is lost.

Run the free analyzer on the page your ads point at and see the SEO, GEO, schema and speed problems eating the return, ranked by what they cost.

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