ROAS calculator, with the break-even ROAS set by your margin
Enter your ad spend, the revenue it brought and your margin: you get the ROAS, the marketing ROI, the break-even ROAS and the cost per customer. Switch to investment mode for a classic ROI with payback period.
- Gross margin
- $6,580
- Result
- $4,580
- Break-even ROAS
- 1.43×
- Acquisition cost
- $63
Profitable: each dollar spent brings $4.70 in revenue, above the 1.43× threshold set by your margin.
The PDF adds the ROI if revenue differs from your forecast, from −50% to +50%, and the formulas.
ROAS formulas
Four numbers to judge a campaign, worked on the calculator’s default example.
- ROAS
Revenue / ad spend
$9,400 of sales for $2,000 of ads: a ROAS of 4.7. - Marketing ROI
(Gross margin − spend) / spend × 100
It counts what you keep, not what you sell. - Break-even ROAS
1 / margin rate
With a 70% margin, the campaign pays for itself from a ROAS of 1.43. - Acquisition cost
Ad spend / new customers
$2,000 for 32 customers: $62.50 per customer.
A good ROAS can still lose money
A ROAS of 4 sounds good: four dollars of sales for each dollar of ads. But what you keep from those sales is your margin. With a 20% margin, $4,000 of sales leave $800, less than the $1,000 you spent.
Move the margin: the break-even ROAS is 1 divided by your margin rate. Below it, every sale costs you money.
Losing money, ROI -20%. With a 20% margin, you need a ROAS of at least 5×: the same ROAS of 4 is not enough.
The ROI of a training course
For a company, training is an investment too. Its full cost includes the course price and the hours employees spend in it; its gain shows up months later, in fewer errors, more sales or time saved.
Change the number of employees and the estimated gain: the ROI follows.
- Full cost
- $12,200
- Gain in year one
- $20,000
- ROI
- 63.9%
The full cost counts the course price and the employees’ time. The gain is measured months later: fewer errors, more sales, time saved, turned into dollars.
ROAS or ROI?
ROAS tells you whether ads bring in sales; ROI tells you whether they bring in money. Use ROAS to compare campaigns with each other, and ROI, or the break-even ROAS, to decide whether a campaign is worth running.
Digital products have high margins
An online course costs almost nothing to deliver once it is made: its margin is high, so its break-even ROAS is low. That leaves more room to advertise than a physical product does.
Follow your sales without a spreadsheet
With Learnybox, revenue, sales and sign-ups show on one dashboard, next to your courses and your sales pages.
Frequently asked questions
Another question? Write to us.
How do you calculate ROAS?
Divide the revenue a campaign generated by what you spent on ads. $9,400 of sales for $2,000 of ad spend gives a ROAS of 4.7: each dollar spent brought $4.70 in revenue.
What is a good ROAS?
The one above your break-even ROAS, which depends on your margin: 1 divided by your margin rate. With a 70% margin, any ROAS above 1.43 makes money; with a 20% margin, you need 5.
Is a 2.2 ROAS good?
It depends on your margin. Its break-even margin is 1 / 2.2, about 46%: above that margin, a 2.2 ROAS is profitable; below it, the campaign loses money even though it brings in more than it costs.
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend. ROI compares profit to cost: it subtracts what the sales cost you. A campaign can have a good ROAS and a negative ROI if the margin is thin.
What ROAS is a 25% ACoS?
A ROAS of 4. ACoS, used on Amazon, is the inverse of ROAS: ad spend divided by revenue. 1 / 0.25 = 4.
How do you calculate ROI?
Subtract the cost from the gain, divide by the cost and multiply by 100. $12,000 invested for $36,000 of gain gives an ROI of 200%. Switch the calculator to investment mode to see the payback period.
How do you measure the ROI of a training course?
Compare the gain over a year (fewer errors, more sales, time saved, in dollars) with the full cost: the course price plus the trainees’ time. This is the approach of Jack Phillips’ ROI model.
Is the calculator free?
Yes. The calculation is free with no account; the PDF with scenarios asks for your email once.
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