ROAS Return on Ad Spend Calculator
Return on Ad Spend (ROAS) Calculator
What is ROAS?
ROAS (Return on Ad Spend) measures how much revenue you generate for every unit of money you spend on advertising.
In simple terms:
ROAS tells you whether your ads are making you money or burning your budget.
If you spend ₹10,000 on ads and generate ₹30,000 in revenue, your ROAS is:
ROAS = 30,000 ÷ 10,000 = 3.0x
That means every ₹1 you spend returns ₹3 in revenue.
ROAS Formula
ROAS = Revenue from Ads ÷ Ad Spend
Where:
- Revenue from Ads = total sales directly attributed to paid ads.
- Ad Spend = total cost spent on ads (Google Ads, Meta, LinkedIn, etc.)
How to Use This ROAS Calculator
Enter:
- Revenue from Ads (₹)
The total revenue generated from paid campaigns. - Ad Spend (₹)
The total amount you spent on those campaigns.
Click Calculate ROAS and you’ll get:
- Your ROAS value (in multiples like 1.5x, 3x, etc.)
- A performance insight explaining what that ROAS means for your business.
How to Interpret Your ROAS
| ROAS Value | Meaning | Business Reality |
|---|---|---|
| < 1.0x | Losing money | You spend more than you earn |
| 1.0x – 2.0x | Weak | Break-even or thin margins |
| 2.0x – 4.0x | Healthy | Sustainable and profitable |
| > 4.0x | Excellent | Strong scalability potential |
Important: A “good” ROAS depends on your margins.
A SaaS business can survive on lower ROAS than ecommerce because margins are higher.
ROAS vs Profit: Don’t Confuse Them
ROAS is not profit.
It only measures:
Revenue return per ad dollar/rupee.
It does not subtract:
- Cost of goods
- Salaries
- Tooling
- Refunds
- Operations
So:
- You can have high ROAS and still lose money.
- You can have low ROAS and still be profitable if margins are huge.
ROAS is a marketing efficiency metric, not a business profitability metric.
Why ROAS Matters
ROAS helps you:
- Decide whether to scale or pause a campaign
- Compare channels (Google vs Meta vs LinkedIn)
- Identify waste in your ad spend
- Protect yourself from emotional marketing decisions
Without ROAS, you’re basically guessing.
Common Mistakes
- Using blended revenue instead of ad-attributed revenue
- Ignoring refunds or cancellations
- Not separating brand vs performance campaigns
- Chasing high ROAS instead of optimal ROAS
High ROAS is not always optimal - sometimes a slightly lower ROAS gives you faster growth.
When Should You Scale?
Scale only when:
- ROAS is stable over time (not just 1 good day)
- Conversion tracking is reliable
- Your funnel can handle more volume
Otherwise, scaling just amplifies inefficiency.
Key Takeaway
ROAS answers one core question:
“Is my advertising actually working?”
Use this calculator to:
- Check campaign viability
- Compare platforms
- Decide scale vs optimize vs stop
Simple metric. Massive consequences.
