Use this ROAS calculator to find out the exact return on your advertising spend, enabling you to assess the financial effectiveness of your marketing campaigns and make informed decisions for future advertising investments.

What is ROAS, Anyway?

ROAS stands for Return on Ad Spend, a marketing metric that measures the revenue earned for every dollar spent on advertising. It helps businesses understand the effectiveness of their advertising campaigns.

ROAS Formula:

ROAS 🟰 Revenue from Ad Campaign ➗ Cost of Ad Campaign

Examples:

• Company A:
  • Revenue from Ad Campaign: $10,000
  • Cost of Ad Campaign: $2,000
  • ROAS = $10,000 / $2,000 = $5 Return on Ad Spend (ROAS)
  • For every dollar spent on advertising, Company A earned $5 in revenue, indicating a successful ad campaign.

• Company B:
  • Revenue from Ad Campaign: $7,500
  • Cost of Ad Campaign: $3,000
  • ROAS = $7,500 / $3,000 = $2.5 Return on Ad Spend (ROAS)
  • Company B earned $2.50 for every advertising dollar spent, which is lower than Company A’s ROAS, suggesting their ad campaign was less efficient in generating revenue.

TL;DR: ROAS helps businesses evaluate the profitability of their advertising efforts, guiding them in optimizing their marketing strategies for better returns. ROAS is represented as a ratio. For example, a ROAS of 5:1 would mean that for every $100 you spend, you generate $500 in revenue.