ROAS calculator
See how much revenue every ₹1 of ad spend brings back, and whether your ads actually make a profit.
What is ROAS?
ROAS (return on ad spend) tells you how much revenue each rupee of advertising brought back. If you spent ₹10,000 on ads and they brought in ₹40,000 of sales, your ROAS is 4x.
The formula
ROAS = revenue from ads ÷ ad spend
Break-even ROAS = 1 ÷ gross margin. With a 40% margin, every ₹1 of revenue leaves ₹0.40 of profit, so you need ₹2.50 of revenue for every ₹1 of ads just to break even.
How to improve ROAS
- Stop or cut ad sets running below your break-even ROAS for more than two weeks.
- Send ad traffic to a page that matches the ad's promise.
- Raise average order value with bundles or a free-shipping threshold.
- Retarget visitors who added to cart but didn't buy.
Questions people ask
What is a good ROAS?
It depends on your margin. Your ads break even when ROAS equals 1 divided by your gross margin. At a 40% margin, you need a ROAS of at least 2.5x before ads make a profit.
How do I calculate ROAS?
Divide the revenue your ads brought in by what you spent on them. ₹40,000 of revenue from ₹10,000 of ad spend is a ROAS of 4x.
Is ROAS the same as ROI?
No. ROAS uses revenue, while ROI uses profit after all costs. A campaign can have a high ROAS and still lose money if margins are thin.
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