Return on Ad Spend (ROAS) is a critical metric for measuring the effectiveness of advertising campaigns. It represents the revenue generated for every dollar spent on advertising. By calculating ROAS, businesses can assess whether their ad campaigns are delivering a positive return or if adjustments are needed to improve performance. ROAS helps marketers allocate budgets more effectively, optimize campaigns, and make data-informed decisions to maximize profitability.
ROAS is calculated by dividing the revenue generated from an ad campaign by the total ad spend. For example, if a campaign generates $10,000 in revenue and the ad spend is $2,000, the ROAS would be 5:1, meaning $5 of revenue is generated for every $1 spent. Inputs like projected budget, cost per click (CPC), conversion rate, average sales price, and lead-to-customer rate play a vital role in estimating ROAS. Use the ROAS calculator below to gain insights into your campaign’s potential return, helping you set realistic goals and refine your strategies.