ROAS calculator.

ROAS is ad revenue divided by ad spend. Break-even ROAS is 1 divided by your contribution margin. Enter your numbers to see both, plus MER.

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Use the same period for every field. Contribution margin is what's left of each sales dollar after product cost, shipping, payment fees and discounts.

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The short answer

ROAS (return on ad spend) equals revenue from ads divided by ad spend. Break-even ROAS equals 1 divided by contribution margin, so a 45% margin needs 2.22x to break even. MER equals total revenue divided by total marketing spend, and it's the better check on whether marketing as a whole makes money.

How do you calculate ROAS?

Divide the revenue your ads generated by what you spent on them.

ROAS = revenue from ads ÷ ad spend

$32,000 in ad revenue on $10,000 in spend is a 3.2x ROAS: every ad dollar brought back $3.20 in sales. The revenue figure comes from the ad platform, which is the weak spot, because Meta, Google and TikTok each count their own version of the same sale.

What is break-even ROAS?

The ROAS at which ads pay for themselves and nothing more. Below it, every sale from ads loses money.

Break-even ROAS = 1 ÷ contribution margin

Contribution margin Break-even ROAS
70% 1.43x
60% 1.67x
50% 2.00x
45% 2.22x
40% 2.50x
30% 3.33x

The lower your margin, the higher the ROAS you need. A brand on 30% margins needs more than double the ROAS of a brand on 70%.

What's the difference between ROAS and MER?

ROAS is one platform grading its own work. MER (marketing efficiency ratio) is your whole store's revenue divided by your whole marketing spend, including fees and tools. It can't be double-counted, so it's the number to trust when the platforms disagree. Read more on why MER beats ROAS.

What does the calculator's example show?

The starting numbers are a typical month for a young brand: $10,000 in ad spend, $32,000 in platform-reported ad revenue, $45,000 in total store revenue, $14,000 in total marketing spend and a 45% contribution margin.

  • ROAS is 3.2x, well above the 2.22x break-even.
  • MER is 3.21x, also above break-even.
  • Profit after marketing is $45,000 × 45% − $14,000 = $6,250.

If ROAS looks great but MER sits below break-even, the platforms are claiming sales that other channels drove, or fees and tools are eating the margin.

What is a good ROAS?

Any ROAS comfortably above your break-even. There's no universal number, because margins differ so much between brands. Set a target 20–30% above break-even to leave room for returns, fees and tracking gaps, then judge the business on MER.

Want someone to run the ads to that target? See paid ads for startups, or browse the other free marketing calculators.

Frequently asked questions

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How do you calculate ROAS?
ROAS equals revenue from ads divided by ad spend. $32,000 in ad revenue on $10,000 in ad spend is a 3.2x ROAS. The revenue figure comes from each ad platform's own attribution, so it can overstate results when several platforms claim the same sale.
How do you calculate break-even ROAS?
Break-even ROAS equals 1 divided by contribution margin. A brand keeping 45% of each sales dollar after product cost, shipping, payment fees and discounts breaks even at a 2.22x ROAS. Anything below that loses money on ad-driven sales.
What is a good ROAS?
A good ROAS is one comfortably above break-even ROAS, which depends on margin. A 50% margin breaks even at 2.0x, so a 2.4x–2.6x target leaves room for returns and tracking gaps. Whole-business profitability is better judged with MER.
Is MER the same as ROAS?
No. ROAS measures one ad platform's reported revenue against its own spend. MER measures total store revenue against total marketing spend across every channel. MER is also called blended ROAS.

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