ROAS Calculator: Find Out If Your Ads Are Making Money

How to Use This ROAS Calculator

Enter your total ad spend and the revenue generated from those ads into the calculator above. The result shows how much revenue you generate for every £1 (or $1) spent on advertising.

Example: If you spend £5,000 on Google Ads and generate £15,000 in revenue, your ROAS is 3:1. For every pound spent, you’re bringing in three pounds back.

What counts as ad spend? Include your total media cost – what you actually pay the platform (Google, Meta, etc.). Don’t include agency fees, creative costs, or your own time unless you’re calculating total marketing ROI rather than ROAS.

What counts as revenue? Use the revenue directly attributed to your ads based on your tracking setup. If you’re using Google Ads conversion tracking, this is your “Conv. value” column. In GA4, it’s your attributed revenue from paid channels.

What is ROAS?

ROAS (Return on Ad Spend) measures how much revenue you generate for every pound spent on advertising. It’s calculated by dividing your revenue by your ad spend.

Formula: Revenue ÷ Ad Spend = ROAS
Example: £15,000 revenue ÷ £5,000 ad spend = 3.00x ROAS. A ROAS of 3.00x means you’re generating £3 in revenue for every £1 spent on ads

How to tell if your ROAS is good

There’s no universal “good” ROAS because it depends entirely on your profit margins and business model.

A 3.00x ROAS might be excellent for a business with 40% margins, but disastrous for one operating at 15% margins. You need to work backwards from your unit economics.

The actual question is: Does this ROAS cover your product costs, overheads, and leave you with acceptable profit?

Example: If your product costs £30 to fulfil (including shipping, packaging, warehousing) and you sell it for £100, you have £70 gross profit. If you spend £25 on ads to acquire that sale, your ROAS is 4.00x – but you’ve only got £45 left to cover everything else and still make profit.

High competition and rising CPCs mean the days of 10x ROAS are largely gone. A sustainable ROAS that covers your costs and generates profit is better than chasing arbitrary targets that ignore your actual economics.

There is no hard-and-fast rule for a good ROAS. Rising competition, high cost per click, and/or impressions mean returns are lower than ever. Strong conversion rate optimisation tactics and super-targeted ads can make all the difference. As could a strong sales team in a lead gen campaign. It depends.

When to use ROAS

ROAS is a good early indicator that your campaigns are covering costs. A high ROAS is also a good indicator that you could scale up your campaigns, which is a good thing from a growth marketing point of view.

ROAS V ROI

ROI (Return on Investment) factors in other marketing costs, how much money was spent on content, agency fees, and additional tools used for example.  ROAS is specific to ad spend; it can also be broken down into platform ROAS. ROAS can differ from Meta, Google, to Native, for example.

Limitations of ROAS

ROAS doesn’t account for unit economics  or factors you may not be in on.  That’s the paradox. You could be smashing a 10x ROAS, thinking it’s a license to print money, but it still may not be enough. 

You could be returning £8 per pound spent, but if that £8 doesn’t cover the product overheads. You’d need to look at other metrics. ROAS has to be high enough to cover the product’s purchase price/manufacturing, shipping, and other costs.

Ultimately, it depends on where your responsibility starts and ends, what the goals of the campaign are, and if there is transparency around profitability in the business.

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