glossary
ROAS
Return on Ad Spend — revenue attributed to an ad campaign divided by its cost; the standard efficiency yardstick for paid media.
ROAS is the paid-media equivalent of asking whether the money came back. A ROAS of 4 (often written 4:1 or 400%) means each ad dollar returned four dollars of attributed revenue. It is a campaign-level metric: useful for comparing channels and creatives, dangerous as a business-level verdict.
The number to know before launching anything is breakeven ROAS: 1 ÷ gross margin. A business at 50% margin breaks even at a ROAS of 2 — anything below that loses money even though revenue "doubled" the spend. Targets should start there and add the profit you need.
ROAS is only as honest as its attribution: platform-reported numbers routinely overclaim by taking credit for conversions other touches created. Compare platform ROAS against blended revenue over total ad spend to spot inflation. The ROAS calculator turns spend, CTR, and conversion rate into projected ROAS and CPA before you spend a dollar.
formula
ROAS = revenue attributed to ads ÷ ad spend
worked example
A $10,000 campaign at 60% gross margin reports $35,000 of attributed revenue: ROAS is 3.5 against a breakeven of 1.67. After margin, the campaign contributed $21,000 of gross profit on $10,000 of spend — genuinely good, if the attribution holds.