ROAS Calculator
Return on Ad Spend (ROAS) allows you to gauge the effectiveness and profitability of your advertising campaign.
(Revenue / Cost) = ROAS
What is ROAS?
Return on Ad Spend (ROAS) allows you to gauge the effectiveness and profitability of your advertising campaign. It measures how much is spent on ads, compared to how much revenue is generated from them. This helps you to determine if you have made a profit (if you have a positive ROAS) or not. A high ROAS indicates that your ad is generating significant revenue relative to how much you spent on it – basically, how much you earn for every dollar you spend, so the higher your ROAS the better! Unlike ROI (Return on Investment), which considers all costs associated with your campaign, ROAS focuses on specific ad costs and how much revenue it generated. A ROAS of 1.0 (or 100%) indicates that your ad made a profit, whereas a ROAS below 1.0 indicates a loss. You can calculate ROAS for single ads, monthly campaigns, or even your entire years’ campaign! The difference between ROAS and ROI (return on investment) is that ROI looks at large advertising efforts, such as hiring agencies and paying employees, whereas ROAS looks at the revenue from a specific ad campaign. ROAS can be reported as a number or a percentage.
How to Calculate ROAS
ROAS can be calculated using the following formula:
(Revenue / Cost)
For example, if your campaign generated $10,000 in revenue, and you spent $2000 on it, you would calculate the ROAS as follows:
10,000/2000 = 5.0 (meaning for every dollar spent, you earned $5 in revenue)
ROAS can be easily calculated on Excel and Google Sheets by following these steps:
- In the first cell, enter the total revenue generated from the ad
- In a second cell, enter the total ad spend
- In a third cell, input the formula (A1/A2)
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