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ROAS Calculator: Return on Ad Spend

Enter attributed revenue and ad spend to get your return on ad spend. Add your gross margin to see the break-even ROAS, the line below which the ads cost more than the profit they bring in.

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ROAS

4.00x

ROAS as a percentage
400%
Break-even ROAS at this margin
1.33x
Gross profit after ad spend
12,000.00

Above break-even: the ads cover their cost from gross profit.

The ROAS Formula

ROAS = revenue from ads / ad spend

Break-even ROAS = 1 / gross margin

ROAS is a ratio, so 4x and 400% mean the same thing. The break-even line matters more than any target you read elsewhere, because it is specific to your margin. Software with an 80% gross margin breaks even at 1.25x; a reseller with a 20% margin needs 5x just to stand still.

Worked Example

Illustrative numbers: a SaaS company spends 6,000 on search ads in a quarter. Deals that first came in through those ads closed for 24,000 in first-year revenue, a 4x ROAS. At an 80% gross margin, gross profit is 19,200, leaving 13,200 after ad spend. Before calling it a win, check the attribution: if most of those deals were already in the CRM before the click, the ads did less than the ratio suggests.

Making ROAS Honest in B2B

  • Pick an attribution rule and keep it. First touch flatters awareness campaigns; last touch flatters brand search. Our post on marketing attribution for personalized websites covers the trade-offs.
  • Use pipeline as a leading indicator. With a 3-9 month cycle, closed revenue arrives too late to steer spend. Report pipeline ROAS monthly and closed-revenue ROAS quarterly.
  • Fix the page before raising the budget. If ad traffic converts poorly, more spend scales the waste. Check the landing page with the conversion rate calculator first.

For how ROAS fits next to CAC and payback in a marketing dashboard, see our short list of B2B marketing KPIs.

Frequently Asked Questions

How do you calculate ROAS?

Divide the revenue attributed to your ads by what you spent on them. 24,000 in revenue from 6,000 in ad spend is a ROAS of 4x, often written as 400%.

What is break-even ROAS?

The ROAS at which gross profit from the attributed revenue exactly covers the ad spend. It is 1 divided by your gross margin: at an 80% margin, break-even ROAS is 1.25x; at a 25% margin it is 4x.

What is the difference between ROAS and ROI?

ROAS compares revenue with ad spend only. ROI compares profit with the full cost of the campaign, including people, tools and creative. A campaign can have a healthy ROAS and a negative ROI. Use the marketing ROI calculator for the full picture.

How do B2B companies calculate ROAS with long sales cycles?

Revenue often closes months after the click, so many B2B teams use pipeline created (or pipeline weighted by stage) as an interim proxy and recalculate with closed revenue once deals close. State which one you are reporting.

Does Google Ads use ROAS for bidding?

Yes. The Target ROAS bid strategy sets bids to get as much conversion value as possible at the return on ad spend you set, which requires conversion values to be tracked.

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