The ROAS formula
ROAS = Revenue from ads ÷ Ad spendUse the revenue your ad platform attributes to the ads (in Meta Ads Manager: “Purchases conversion value”) and the amount spent in the same period.
ROAS is usually written as a multiple (3.50×) and sometimes as a percentage (350%). They mean the same thing.
Is my ROAS good?
There is no universal “good ROAS”. It depends on how much of each sale you keep after product costs, shipping and fees. A 3× ROAS is very profitable for a store with high margins and a loss for one with thin margins.
The number to compare against is your break-even ROAS: the ROAS at which ads pay for themselves and nothing more. Above it, your ads make money. Below it, they lose money, however good the ROAS looks.
ROAS is not profit
ROAS only looks at revenue. It ignores what the products cost you, so two campaigns with the same ROAS can have very different profits. To see what you actually kept, use the advertising profit calculator.
Questions
What is a good ROAS?
One that is above your break-even ROAS. Work it out from your price and costs with the break-even ROAS calculator; it is different for every business.
What’s the difference between ROAS and ROI?
ROAS divides revenue by ad spend. ROI divides profit by what you invested. ROAS can be high while ROI is negative, when product costs eat the revenue.
Which revenue should I use?
The revenue the ads brought in during the period, as your ad platform or analytics reports it, before refunds. Use the same date range for spend and revenue.