Free tool
ROAS calculator: are your ads making a profit?
Enter your ad spend, the revenue from your ads and your gross margin, and see your ROAS, your break-even ROAS and the profit left after ads.
ROAS
4
Each $1 of ads brought $4 of revenue.
Break-even ROAS
2.5
Where an ad pays for itself at a 40% margin.
Gross profit after ads
$6,000
Your ads are making a profit.
What is ROAS, and how is it calculated?
ROAS (return on ad spend) is the revenue from ads divided by ad spend. Spend $10,000 and bring in $40,000 of revenue, and your ROAS is 4: each $1 spent brought $4 of revenue.
MER (marketing efficiency ratio) is the store's total revenue divided by total ad spend. Because platforms' overcounting does not touch it, it is more reliable for seeing overall health.
Break-even ROAS
Break-even ROAS is the point where an ad pays for itself: 1 ÷ gross margin. At a 40% gross margin, break-even ROAS is 2.5; below that, a sale does not cover the product and the ad.
Shipping, payment fees and returns lower your margin; working with a margin that takes them off gives a more realistic result.
Your real ROAS, every day
IQsion works this out from your store's revenue, your product costs and every ad account's spend.
Questions
What is a good ROAS?
There is no one right number; it depends on your margin. Anything above your break-even ROAS is profit, anything below is a loss.
ROAS or MER?
ROAS to compare campaigns with each other, MER for the health of the business. The ROAS platforms report is usually higher than the real one; it should be checked against store orders.
Related pages
See your numbers against your store's own orders
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