How to Calculate ROAS
You can calculate ROAS (Return on Ads Spend) through this simple calculation, Revenue ÷ Ad Spend. This metric helps you measure the financial effectiveness of your ads.
ROAS can be typically outlined as a % or $ to highlight the efficiency ofg the campaign. How you show ROAS differs depending on the clients wants. Read more about this here.
Calculate Your ROAS
Your ROAS
Enter your revenue and ad spend to see your ROAS
What is ROAS?
ROAS (Return on Advertising Spend) measures the revenue generated for every dollar spent on advertising campaigns.
Formula: ROAS = Revenue ÷ Ad Spend
A ROAS of 4:1 means you generate $4 in revenue for every $1 spent on advertising. Higher ROAS indicates more efficient advertising spend.
Note: ROAS measures revenue, not profit. Consider your profit margins when evaluating campaign success.
Industry Benchmarks
*Benchmarks vary greatly by business model and profit margins
Tips to Improve ROAS
If ROAS is your objective you need to focus on the variables that will generate the most revenue for you. High-intent keywords and audiences such as retargeting are the best way to increase your ROAS.
It's not all about the ads themselves, you need to be constantly testing your on site experience, to ensure you are driving the most conversions possible. Simple optimizations like placing purchase buttons higher up the page or providing testimonials such as customer ratings to clearly articulate real use cases and benefits of the product will help you achieve a higher ROAS.
Retargeting focuses on audiences who have already interacted in some way with your content. these are high values audiences, so implement a solid retargeting strategy to secure their purchase. Tailor their messaging to something warmer as they already are aware of your products/services.
Test to see what works. In 2025 you can let the channel do a lot of the testing, multiple ads in one ad group will weed out the underperforming creative pretty quickly. Use this insight to help guide your future creative and messaging.
Simple, but effective. Make sure you are pacing your campaigns accordingly to ensure every dollar spent is maximizing your output.
Critical to ensure you are not wasting your budget on irrelevant traffic. Use negative keywords to filter out traffic that is not relevant to your business. This will help you focus your budget on the most relevant and profitable traffic.
Allow the channel to work out what audiences are most profitable for you. Layer in 1PD audiences to help this process.
We live in a mobile world. Check using website analytics tools such as GA4 or your web builders analytics tools to see how much mobile traffic you are getting. Tailor your landing pages toward mobile friendly designs to ensure the user experience is at a high quality.
Use the data you have to adjust your bids. If you are consistently seeing high ROAS on certain keywords or audiences, increase your bids to capture more traffic. However, if certain keywords or audiences are not performing well, reduce your bids or pause them altogether.
ROAS is important, but it's not the only metric that matters. Track the lifetime value of your customers to understand the long-term value of your advertising spend. Understanding this is a key metric to help you realize the value of each customer long term.