ROAS calculator (return on ad spend)

This ROAS calculator does two jobs. Check a campaign: put in what the ads cost and what they brought in, add your margin, and it tells you your return on ad spend, your break-even ROAS and the profit left after the ads. Or set a target: tell it your margin and the profit you want, and it gives you the target ROAS to enter in Google Ads or Meta.

Under More options it takes VAT out of your revenue for you, and turns a count of orders into what each order cost and the most you can afford to pay for one.

What is ROAS?

Return on ad spend is revenue from the ads divided by what the ads cost. €4,000 of sales from €1,000 of ads is a ROAS of 4, written 4, 4x, 4:1 or 400%. They all mean four back for every one spent.

How to calculate ROAS (the ROAS formula)

What is a good ROAS

Any ROAS comfortably above your break-even. That’s the whole answer, and it’s why industry averages are so little use here. The same ROAS is a healthy profit for one business and a slow loss for another.

Your margin decides it. Here is the break-even ROAS for common margins:

A shop selling its own designs on a 60% margin can grow happily at a ROAS of 2. A reseller on 20% loses money on every sale below 5. Put your margin in the calculator and it draws the same table for your spend, with your result and your break-even marked.

Should ROAS include VAT?

No. Work it out on revenue before VAT, because the VAT was never yours. Shop totals and some conversion tracking include it, which flatters every figure by the rate.

Divide by 1.23 for Irish VAT or 1.2 for UK VAT before you start, or tell the calculator under More options and it does it for you, with the working shown.

ROAS vs ROI

They sound alike and measure different things. ROAS is revenue against ad spend. ROI is profit against everything you put in: the goods, the delivery, the agency fee, the time.

So ROAS is the quick daily read on the ads themselves, and ROI is the verdict on the business. A campaign can post a ROAS of 3 and still lose money if the margin is thin and the fees are high. The profit line in the calculator is a step towards ROI: it takes the cost of the goods out, but not your other costs.

ROAS and ACoS

ACoS, advertising cost of sale, is the measure Amazon sellers use. It’s the same comparison turned upside down: ad spend ÷ sales. A 25% ACoS is a ROAS of 4. The calculator shows both.

Target ROAS in Google Ads and Meta

Both platforms let you bid for a return. You tell them the return you want and they bid to hit it on average. Google Ads takes it as a percentage, so a target ROAS of 3.33 is entered as 333%. Meta’s ROAS goal takes the plain number.

Set it from your break-even, not from a hope. Too high and the platform finds almost nobody to show the ad to, so spend dries up. Too close to break-even and a bad week wipes out the profit. The “Set a target” mode works it out from your margin and the profit you want left over.

Why the platforms and your shop disagree

Put the ROAS in Google Ads or Meta beside the sales in your shop and they rarely match. Three things usually explain the gap.

Attribution is the first. Each platform counts a sale as its own if it followed an ad within its window. On Meta’s standard setting, that’s a click in the last seven days or a view in the last day. So a customer who saw your Facebook ad and then clicked a Google ad can be claimed by both.

VAT is the second. Refunds are the third. The platforms count the sale. Your accounts count what you kept.

The fix is to agree one source of truth, usually your shop or your analytics, and read the platforms’ figures for direction rather than accuracy. Google Ads vs Facebook Ads covers which platform suits which kind of shop, and we set these up and run them if you would rather not.