ROAS (Return on Ad Spend) Calculator
Enter ad spend, revenue and gross margin to see ROAS, ACoS, profit after ad spend and the exact break-even point.
Your ACoS (ad cost of sale) is 25.0%. At a 60% gross margin you need at least 1.67x ROAS to break even — this campaign is currently profitable.
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ROAS Formulas, Target Benchmarks and Campaign Scaling
Return on ad spend is revenue divided by advertising cost. Spend $2,000 to generate $8,000 and your ROAS is 4x, or 400%. Its inverse, ACoS, expresses the same relationship as a percentage of revenue consumed by advertising — useful when a marketplace or client reports costs that way.
The number that actually matters is break-even ROAS, calculated as 1 divided by your gross margin. At a 60% margin you break even at roughly 1.67x, so a 2x campaign is genuinely profitable; at a 25% margin you need 4x just to stand still, and that same 2x campaign is losing money on every order. This is why blanket benchmarks are misleading — the widely quoted 4x target only fits typical ecommerce margins.
When scaling, expect ROAS to fall as you push past your best-performing audiences: broader reach costs more per conversion. Decide in advance the ROAS floor at which incremental spend stops being worth it, judge results over a full purchase cycle rather than a single day, and include repeat-purchase value if you know your customer lifetime value.
Frequently asked questions
It depends entirely on your margin. Divide 100 by your gross margin percentage to find break-even, then target comfortably above it — around 3x to 4x for typical ecommerce margins.