How to evaluate ROAS
Compare revenue per spend with the margin-based break-even.
1
Enter attributed revenue
Use a consistent attribution model and window.
2
Enter total ad spend
Include platform, creative and agency costs.
3
Check break-even ROAS
The threshold rises as gross margin falls.
What does this tool do?
Return on ad spend is revenue divided by advertising cost. It is a quick efficiency measure, but it ignores product costs, so the break-even ROAS depends on gross margin and is the more useful benchmark.
The Formula
ROAS = Attributed revenue ÷ Ad spend; Break-even ROAS = 1 ÷ Gross marginFrequently Asked Questions
What is a good ROAS?
A ROAS above 1 does not guarantee profit. Compare it with your break-even ROAS, which is 1 divided by gross margin; a 25% margin needs a ROAS above 4 to break even.
Should ROAS use revenue or gross profit?
Standard ROAS uses revenue. For decisions, pair it with margin, or use a profit-based return such as ROI, to see whether the campaign actually earns money.