Return on Ad Spend Calculator Formula

Understand the math behind the return on ad spend calculator. Each variable explained with a worked example.

Use the Return on Ad Spend Calculator

Formulas Used

ROAS

roas = ad_spend > 0 ? revenue_from_ads / ad_spend : 0

ROAS Percentage

roas_pct = ad_spend > 0 ? (revenue_from_ads / ad_spend) * 100 : 0

Net Revenue After Ad Spend

net_revenue = revenue_from_ads - ad_spend

Variables

VariableDescriptionDefault
revenue_from_adsRevenue from Ads(USD)50000
ad_spendTotal Ad Spend(USD)10000

How It Works

How to Calculate Return on Ad Spend

Formula

ROAS = Revenue from Ads / Ad Spend

ROAS measures how effectively your advertising budget translates into revenue. A ROAS of 4.0 means every dollar of ad spend generates $4 in revenue. Unlike ROI, ROAS focuses solely on gross revenue and does not subtract product costs or overhead, so a profitable campaign typically needs a ROAS well above 1.0 to cover those expenses.

Worked Example

An advertising campaign generated $50,000 in revenue from $10,000 in ad spend.

revenue_from_ads = 50000ad_spend = 10000
  1. 01ROAS = $50,000 / $10,000 = 5.0
  2. 02ROAS % = 5.0 x 100 = 500%
  3. 03Net Revenue = $50,000 - $10,000 = $40,000

Ready to run the numbers?

Open Return on Ad Spend Calculator