What is ROAS?
ROAS (return on ad spend) is revenue from ads divided by ad spend. Formula: ROAS = Revenue from ads ÷ Ad spend. A 4x ROAS means you earn $4 for every $1 spent on ads. ROAS does not include cost of goods or profit—use ROI for that.
How to calculate ROAS for ecommerce
To calculate ROAS, you need two numbers: (1) the revenue attributed to your ads, and (2) the ad spend. Divide revenue by ad spend. Example: $10,000 ad spend and $40,000 in attributed revenue gives ROAS = 4 (often written as 4x). Use our free ROAS Calculator to plug in your numbers and see your ROAS instantly.
What is a good ROAS for ecommerce?
Many ecommerce brands target 4x or higher for paid social. 2–3x can still be profitable depending on margins. Below 1x means you lose money on that spend. To factor in margins and see profit (not just revenue), use our ROI Calculator. For comparing ROAS across channels, try our Social Media ROAS Calculator and Marketing Channel ROI Comparator.
ROAS vs ROI
ROAS uses revenue; ROI uses profit. If your margin is low, a 4x ROAS might still lose money once you subtract COGS. For profit-based decisions, use our ROI Calculator and Product Profitability Analyzer alongside ROAS.
FAQ
- How do you calculate ROAS for ecommerce?
- ROAS = Revenue from ads ÷ Ad spend. For example, if you spend $1,000 on ads and get $4,000 in attributed revenue, ROAS = 4 (or 4x). Use our free ROAS Calculator to enter your numbers and get your ROAS instantly.
- What is a good ROAS for ecommerce?
- Many ecommerce brands target 4x or higher for paid social. 2–3x can be profitable depending on margins. Below 1x means you lose money on that spend. Use our ROI Calculator to factor in margins and profit.
- Is there a free ROAS calculator?
- Yes. Our ROAS Calculator is free with no signup. Enter ad spend and revenue from ads to see your ROAS. For channel comparison use our Social Media ROAS Calculator and Marketing Channel ROI Comparator.
For more free ecommerce growth tools—LTV calculator, profitability analyzer, pricing simulator—see our tools hub and Free Ecommerce Growth Tools page.