ROAS Calculator

ROAS formula

ROAS = revenue attributable to ads/ Cost of ads

When to calculate ROAS

ROAS should be calculated at regular intervals to continuously monitor and evaluate the performance of your ad campaigns over time. ROAS can be calculated separately for your search engine ads, banner ads, and social media ads so that you can identify which campaigns are delivering the best results and where you need to optimize.

Understanding the ROAS result

• A high ROAS indicates that your advertising campaigns are highly effective and that they are generating substantial revenue when compared to what you’re spending on ads.
• A low ROAS suggests that your campaigns may not be as effective. This signals a need for optimization in terms of your ad platform, messaging, or ad spend allocation.

How to calculate ROAS with example

Imagine you spent $2,000 on an ad campaign that generated $10,000 in revenue. You can calculate the ROAS as follows:

** ROAS = revenue attributable to ads/ Cost of ads **

ROAS = ($10,000 / $2,000) = $5

This means that for every $1 you spent on advertising, you earned $5 in revenue.