About roas calculator
Return on ad spend (ROAS) tells you how much revenue each rupee of advertising brings in.
Formulas
- ROAS = revenue from ads ÷ ad spend. ₹40,000 of ads that bring ₹1,60,000 gives a ROAS of 4.
- ACOS = ad spend ÷ revenue × 100, the inverse of ROAS.
- Break-even ROAS = 1 ÷ profit margin.
Margin matters
With a 25% margin, you need a ROAS of 4 just to break even. A ROAS above that is profit.
A worked example
Spending ₹50,000 on ads that produce ₹2,25,000 in sales gives a ROAS of 4.5, or an ACOS of 22.2 percent. If your profit margin is 30 percent, the break-even ROAS is 1 ÷ 0.3 = 3.33, so this campaign is profitable.
Look beyond ROAS
ROAS counts revenue, not profit. Include product cost, shipping, returns and fees in your margin before judging a campaign.
