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Ad Spend ROI Calculator
Compares the revenue generated by an ad campaign against the total cost of the campaign.
How to Calculate Ad Spend ROI Calculator
The formula to calculate this metric is straightforward.
Ad ROI = ((Revenue from Ads - Ad Spend) / Ad Spend) x 100
A Real-World Example
Scenario: Revenue from ads = $40,000, Ad spend = $8,000
Net Profit: $40,000 - $8,000 = $32,000
Ad ROI: ($32,000 / $8,000) x 100 = 400%
ROAS: $40,000 / $8,000 = 5.0x
Why Ad Spend ROI Calculator Matters for Your Business
- Directly measures whether your advertising dollars are generating profit or being wasted.
- ROAS benchmark helps set bid strategies and campaign optimization targets.
- Essential for scaling campaigns: only increase spend on channels with proven positive ROI.
Frequently Asked Questions
What is a good ROAS?
A 4:1 ROAS (400%) is considered healthy for most e-commerce businesses. Below 2:1 means you are barely breaking even after product costs.
What is the difference between ROI and ROAS?
ROAS measures gross revenue return on ad spend. ROI measures net profit after subtracting product costs and other expenses from that revenue.
How do I improve ad ROI?
Refine audience targeting, improve ad creative, optimize landing pages, use retargeting, and pause underperforming ad sets.