There is no universal answer, because it depends entirely on your gross margin. A 2x ROAS is profitable for a business keeping 70% margin and loss-making for one keeping 30%. Work out your break-even ROAS first (1 divided by your gross margin), then decide how much profit you want above it.

How do I calculate ROAS?

Divide the revenue attributed to your ads by the amount you spent on those ads. $8,000 of revenue from $2,000 of spend is a ROAS of 4.0, also written as 4x or 400%.

What is the difference between ROAS and ROI?

ROAS compares revenue to ad spend only. ROI compares profit to total cost, including product cost, shipping, payment fees and overhead. ROAS is the campaign metric, ROI is the business metric, and a healthy ROAS can still sit on top of a negative ROI.

What is blended ROAS?

Total revenue from all sources divided by total ad spend across all platforms. It ignores per-platform attribution claims, so it cannot be inflated by two channels taking credit for the same order. It is the number most operators end up managing to.

ROAS calculator: work out return on ad spend

Ad spend$Revenue from those ads$Gross margin%Revenue minus cost of goods, as a percentage. Leave blank to skip break-even.

ROAS4x

ROAS as a percentage400%

Break-even ROAS2.5xThe ROAS you need just to cover product cost and ad spend.

Gross profit after ad spend$1,200

ROAS = Revenue ÷ Ad spend · Break-even ROAS = 1 ÷ Gross margin

In short

ROAS (return on ad spend) is revenue divided by ad spend. Spend $2,000 and make $8,000 and your ROAS is 4.0, often written as 4x or 400%. On its own that number does not tell you whether you made money: you need to compare it against your break-even ROAS, which is 1 divided by your gross margin. At a 40% margin you need a ROAS above 2.5 just to break even.

Why ROAS on its own is a trap

A 3x ROAS sounds like a win until you check the margin behind it. If you keep 30 cents of every dollar, break-even is 1 divided by 0.30, which is 3.33x. At 3x you spent a dollar, made three, and those three dollars carried $2.10 of product cost, so you are down ten cents. You worked to lose money.

That is why this calculator asks for gross margin. Break-even ROAS is 1 divided by your margin, and it is the only number that tells you whether a campaign is actually contributing. Every ROAS target you set should start there and add the profit you want on top.

Platform ROAS is not the same as your ROAS

The ROAS in Meta Ads Manager counts conversions the platform believes it caused, inside its own attribution window. Google reports its own version. Neither knows about the other, and neither reconciles against what actually landed in your store. Run both and the numbers will double-count.

The number worth managing to is blended: total revenue across every channel divided by total ad spend across every channel. It is less flattering and much harder to fool.

Frequently asked questions

What is a good ROAS?: There is no universal answer, because it depends entirely on your gross margin. A 2x ROAS is profitable for a business keeping 70% margin and loss-making for one keeping 30%. Work out your break-even ROAS first (1 divided by your gross margin), then decide how much profit you want above it.
How do I calculate ROAS?: Divide the revenue attributed to your ads by the amount you spent on those ads. $8,000 of revenue from $2,000 of spend is a ROAS of 4.0, also written as 4x or 400%.
What is the difference between ROAS and ROI?: ROAS compares revenue to ad spend only. ROI compares profit to total cost, including product cost, shipping, payment fees and overhead. ROAS is the campaign metric, ROI is the business metric, and a healthy ROAS can still sit on top of a negative ROI.
What is blended ROAS?: Total revenue from all sources divided by total ad spend across all platforms. It ignores per-platform attribution claims, so it cannot be inflated by two channels taking credit for the same order. It is the number most operators end up managing to.

Other free tools

Break-even ROAS calculatorFree break-even ROAS calculator. Enter your gross margin to find the exact return on ad spend you need before a campaign makes any profit.CPA calculatorFree CPA calculator. Enter spend, clicks and conversions to get cost per acquisition, cost per click and conversion rate in one place.AOV calculatorFree average order value calculator. Enter revenue and orders to get AOV, plus the CPA headroom a higher AOV buys you.Engagement rate calculatorFree engagement rate calculator. Enter engagements plus reach, impressions or followers to get all three engagement rates at once.

Stop calculating this by hand

Muze reads these numbers straight out of your Meta, Google, Amazon and Shopify accounts and tells you which campaigns are below break-even. Ask it from ChatGPT or Claude. Every change previews before it runs.

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