# ROAS Calculator

Last updated November 2023

ROAS, along with CPA and Conversion Rate, is a core metric for any online advertising campaign. Use our ROAS calculator to compare the results of different campaigns, creatives, or ad platforms.

Alternately, experiment with it to test different scenarios and forecast future results. Understanding this metric will help you improve the financial success of your campaigns.

## What Does ROAS Mean?

ROAS stands for Return On Ad Spend and means the amount of money you get back from the amount you put into advertising. Use it to answer the question, “If I spend one more dollar on advertising, how much would I get back in return?”.

ROAS is best used for budget allocation and optimisation. Compare and contrast ad performance in different places and move your ad spend accordingly.

It differs from ROI in that ROI takes into account all the money that you have spent (including labour and manufacturing costs), while ROAS is only about ad spend and revenue. Use ROI for long-term planning and measuring. Use ROAS to decide where to allocate more budget in the short term.

## ROAS Formula

The ROAS equation is:

Click to enlarge

## Example

Imagine you spend £1,100 on advertising on Facebook to sell a new type of fork. Your advertising goes incredibly well, and you sell 2,800 forks. Each fork sells for £1.50, resulting in £4,200 in revenue.

• Conversions: 2,800
• CPA: £0.39 [1,100 ad spend ÷ 2800 conversions]
• Revenue: £4,200 [2,800 conversions x £1.50 price per unit]
• ROAS: 382% [£4,200 revenue ÷ £1,100 ad spend]

This means that for every £1 you give to Facebook, they give you £3.82 in sales back. This is an easy and direct measurement of an ad campaign’s success that you could compare to other ad campaigns, creatives, or platforms.