Enter your ad spend and the revenue it generated to find your ROAS, then factor in margin to see real ad profit and your break-even point.
Return on ad spend (ROAS) measures how much revenue each dollar of advertising generates. It is the headline efficiency metric for paid marketing on Google, Meta, TikTok, and every other ad platform, and it tells you at a glance whether a campaign is pulling its weight.
ROAS is simply Revenue from Ads ÷ Ad Spend. Spend $2,000 and generate $8,000 in revenue and your ROAS is 4.0, often written as 4:1 or 400%. It means every advertising dollar returned four dollars of revenue.
A high ROAS does not automatically mean profit. If your product margin is 50%, you keep only half of each revenue dollar, so you need a ROAS above 2.0 just to break even on the ad. The break-even ROAS = 1 ÷ Profit Margin. At a 50% margin that is 2.0; at 25% it climbs to 4.0. Always compare your actual ROAS to this threshold.
Tip: ROAS measures revenue, not profit. For a true profitability view, look at POAS (profit on ad spend), which divides gross profit — not revenue — by ad spend. This calculator estimates ad profit by applying your margin.
It depends entirely on margins. A 4:1 ROAS is a common rule-of-thumb target for ecommerce, but a high-margin software business can thrive at 2:1 while a low-margin retailer may need 6:1 or more. Define your break-even first, then set a target comfortably above it to leave room for overhead and profit.