ROAS Calculator
Calculate your Return on Ad Spend (ROAS) to measure advertising effectiveness.
Formula
What is ROAS?
ROAS (Return on Ad Spend) is a marketing metric that measures the revenue earned for every dollar spent on advertising. It helps e-commerce sellers evaluate the effectiveness of their ad campaigns on platforms like Facebook, Google, Instagram, and TikTok.
A ROAS of 4.0x means you earn $4 for every $1 you spend on ads. Generally, a ROAS above 3.0x is considered good for most e-commerce businesses, though this varies by industry and margins.
How to Calculate ROAS
To calculate ROAS, divide your total revenue generated from ads by your total ad spend:
- Step 1: Determine your total revenue from the ad campaign
- Step 2: Determine your total ad spend for that campaign
- Step 3: Divide revenue by ad spend
For example, if you spent $500 on Facebook Ads and generated $2,000 in revenue, your ROAS is $2,000 ÷ $500 = 4.0x
ROAS Benchmarks by Industry
Average ROAS varies significantly across e-commerce niches:
- Fashion & Apparel: 3.0x – 5.0x
- Beauty & Cosmetics: 3.5x – 6.0x
- Electronics: 2.5x – 4.0x
- Home & Garden: 3.0x – 5.0x
- Health & Wellness: 4.0x – 8.0x