ROAS calculator with the break-even line your margin sets

Return on ad spend is revenue attributed to advertising divided by what the advertising cost. It is expressed as a multiple (4.0x) or a percentage (400 percent), and it is the metric ad platforms optimise for when you use Target ROAS bidding. It is clean, fast and comparable across campaigns, which is why it is the most quoted number in paid media.

It also ignores every cost except the ads. A 4.0x ROAS on a product with a 25 percent gross margin returns exactly the ad spend and nothing else: €48,000 of revenue is €12,000 of gross profit, which is what the ads cost. That is why the calculator asks for a margin. Without it, ROAS is half a number.

Break-even ROAS is one divided by gross margin. At a 40 percent margin you need 2.5x just to cover the ad spend; at 25 percent you need 4.0x; at 70 percent, 1.43x. Anything above the line is profit, anything below is a loss the revenue figure hides. It is the first number to establish before setting a Target ROAS, and the one most accounts have never calculated.

Return on investment is the profit view: (gross profit minus ad spend) divided by ad spend. The same €48,000 of revenue at a 40 percent margin is €19,200 of gross profit, minus €12,000 of ads is €7,200 profit, which is a 60 percent ROI on the ad spend. ROAS tells you the campaigns returned four times the money; ROI tells you the business kept sixty percent of what it spent. Both are true; only one belongs in a board deck.

Above break-even by enough to fund the rest of the business. For most e-commerce brands that means 3x to 4x; for high-margin software and services 2x can be excellent; for a lead-gen business where the deal closes months later, ROAS measured on closed revenue is the only version that means anything, and it often looks poor for weeks before it looks very good.

Two traps. First, the platforms' own ROAS uses their own attribution and their own conversion window, and Meta, Google and GA4 will report three different numbers for the same month. Second, a rising ROAS as you cut spend is not improvement: the last euros cut were the least efficient, and the remaining ones were always going to look better. Judge ROAS at a given scale, against your margin, on revenue your CRM confirms.