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ROAS calculator

Calculate return on ad spend as a revenue multiple while keeping revenue separate from profit.

Last updated

Written by Madly editorial

01 / Your inputs

Run the numbers

Example figures are filled in so you can see a result straight away. Replace them with your own. Results update as you type; no data is sent or saved.

£

Revenue attributed to the ads, in the same currency as spend.

£

Total media spend; must be greater than zero.

02 / Calculation

Return on ad spend

Calculated result

3×

Unit: ×

Formula

ROAS (×) = attributed revenue (£) ÷ ad spend (£).

How to read this

For every £1 in ad spend, your inputs attribute £3 in revenue. Revenue exceeds ad spend, but that does not establish profit. ROAS excludes product costs, fees, returns and overheads.

Compare with your cost-based break-even ROAS

Assumptions

Revenue and spend must use the same currency, reporting window and attribution convention. Revenue is not contribution margin.

How to use this tool

  • Take the revenue attributed to your ads and the ad spend for the same period.
  • Enter both and read the revenue per unit of spend.
  • Compare it with your break-even ROAS to see whether the ads cover their costs.
  • Check the attribution window, because a longer window makes ROAS look higher.

Worked example

Illustrative example: £1,200 in attributed sales from £400 ad spend gives 3× ROAS.

What this measures

Return on ad spend (ROAS) compares attributed sales revenue with ad spend, before product and fulfilment costs.

Formula and units

ROAS (×) = attributed revenue (£) ÷ ad spend (£).

Assumptions and review notes

Revenue and spend must use the same currency, reporting window and attribution convention. Revenue is not contribution margin.

3× does not mean a 3× profit. Compare it with your own break-even ROAS based on your costs.

ROAS is revenue, not profit. Whether 3.0 is good depends on your margin, so a 60% margin store and a 25% margin store need very different numbers. The right comparison is your break-even ROAS. Anything above it earns something toward overheads and profit, and anything below it loses money on each order.

  • Gross margin and product cost.
  • Shipping, fees and returns.
  • Attribution window and view-through credit.
  • Repeat purchases that platform reports may not count.
  • Equating high ROAS with profit.
  • Comparing ROAS from different attribution windows.
  • Ignoring that platform ROAS and your store revenue may differ.
  • Scaling on ROAS from a very small number of orders.

A closer look

Common questions.

What does ROAS stand for?
Return on ad spend. It is attributed revenue divided by ad spend.
Is 4x ROAS good?
It depends on margin. At a 20% margin 4x is below break-even, while at 50% it is comfortably above it.
Why is platform ROAS higher than my store data?
Platforms may count conversions you would credit elsewhere and may use longer windows. Compare against your own revenue as well.
ROAS or MER?
ROAS is channel level and attributed. MER divides total revenue by total marketing spend and avoids attribution arguments.
What should I do with a low ROAS?
Check conversion rate, order value and the offer first, then creative. Do not cut spend or scale without knowing your break-even.

From reading to making

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