ROAS calculator

Attributed revenue is the platform's own figure, inside the attribution window the account is set to. That is a softer number than it looks. The same campaign, over the same days, reports different revenue under a one-day click window than under seven-day click and one-day view, and neither figure is wrong — they are answers to different questions. If you are comparing this month to last, the only safe move is to confirm the window did not change in between, because platforms adjust their defaults quietly and the change surfaces as a performance story that never happened.

Ad spend is firmer, but it is still the platform's figure in the account's own currency. A business running three accounts in three currencies has three returns that cannot be averaged without a stated exchange rate, and an average taken without one is a number nobody can check. This calculator does no conversion at all: type every field in one currency and read every result in that same currency.

Gross margin is the percentage of revenue left after the cost of goods — the product, the freight inbound, the payment fees, whatever your accounting treats as direct cost. It is optional here because plenty of people arrive knowing their revenue and their spend and nothing else. Supply it and the calculator stops being a division and starts being an answer.

The useful question is never whether 3 is a good return. It is what return this particular business needs, and that figure is arithmetic rather than opinion:

Break-even ROAS = 1 ÷ gross margin

At a 50% gross margin every unit of revenue carries half a unit of gross profit, so a unit of media needs two units of revenue to come back level: break-even 2.0. At 40% it is 2.5. At 25% it is 4.0. At 15% it is 6.67 — and a campaign returning 5 is losing money while its dashboard looks healthy.

This is why a published average is close to useless as a target. Two businesses reporting the same return and running different margins are in completely different situations, and the ratio does not know the difference. The figure from a study describes somebody else's cost structure; the figure from the field above describes yours.

Break-even is a floor, and it ignores fixed costs entirely. A business sitting exactly on it is paying for its advertising and for nothing else in the building.

The third output is the one that changes arguments, because it is an amount rather than a ratio. Revenue multiplied by the margin, minus the spend, is the gross profit the campaign produced after the media that produced it.

Ratios hide size. A campaign whose revenue held steady while its spend fell reports a higher return and a smaller business behind it. A campaign that doubled both reports an unchanged return and twice the profit. Neither fact is visible in the ratio, and both are visible the moment an amount sits beside it. When the return falls and the gross profit rises, an account is usually scaling correctly and somebody is about to be asked to explain the first number without being shown the second.

It double-counts across platforms. Each platform attributes conversions with its own model and its own window. A person who saw one ad, searched the brand, clicked a second and bought appears in both platforms' revenue. Add the two returns together and the total exceeds what the business actually took.

It counts demand it did not create. Branded search is the clearest case: somebody who had already decided to buy searches the name, clicks the ad above the organic result, and converts. That revenue lands in the campaign's return whether or not the ad existed.

It has no memory. A campaign that acquires customers who order again for two years and a campaign that acquires one-time buyers can report identical returns in the month they ran. Only lifetime value separates them, and no ad platform can see it.

It punishes prospecting by construction. Retargeting a warm audience always returns more than reaching a cold one, because the revenue was nearly there already. An account optimised purely on this ratio drifts toward the audiences closest to purchase, shrinks its reach, and then wonders why volume stopped growing.

The instinct is to cut spend, and cutting spend does raise the ratio — a smaller, more efficient account is still a smaller account. Work through the cheaper moves first.

Start with measurement rather than media. Confirm the attribution window has not moved, that conversion tracking fires on every purchase, and that the values sent to the platform are order totals rather than line items. A surprising share of sudden collapses are tracking failures wearing a performance costume.

Then improve the quality of the denominator. Excluding the placements, search terms, audiences and regions that consistently return least raises the ratio without shrinking reach. That is subtraction rather than reduction, and it is almost always available.

Then look at the numerator. Average order value moves the ratio as directly as spend does and is often easier to move: a bundle, a threshold, a better-chosen product in the ad. A return that fell while conversion count rose is a mix shift toward cheaper products, which is a merchandising decision wearing a media costume.

Only then adjust budgets, and adjust them against the break-even figure in the box above rather than against a number somebody published about a different business.