What is ROAS?
ROAS (return on ad spend) is the revenue your ads generate for every rupee you spend on them. The formula is ROAS = revenue from ads / ad spend. A ROAS of 4x means every ₹1 of ad spend brought in ₹4 of revenue.
What is a good ROAS?
A good ROAS is any ROAS above your break-even ROAS, and that number depends on your margin, not on an industry average. Break-even ROAS = 1 / gross margin. At a 40% margin you need 2.5x just to cover the ad cost; at a 20% margin you need 5x. That is why a 3x ROAS can be excellent for one brand and a loss for another.
ROAS vs ROI: what is the difference?
ROAS looks at revenue; ROI looks at profit. ROI on ad spend = (revenue × margin − ad spend) / ad spend. Use ROAS to compare campaigns quickly inside Google Ads or Meta Ads Manager, and ROI or profit after ad spend to decide where the next rupee of budget should go.
How to use this ROAS calculator
- Pick one period. Use the same date range for spend and revenue, for example the last 30 days.
- Use attributed revenue. Take revenue from your conversion tracking, ideally checked against your store or CRM.
- Enter your real margin. Gross margin after product cost, shipping and payment fees, not your markup.
- Compare with break-even. Scale campaigns above break-even ROAS, fix or pause the ones below it.
Want to improve the number? Start with accurate conversion tracking, then read our Google Ads guide, our Meta Ads guide and the CRO guide.