Return on Ad Spend (ROAS) is the calculation of Spend Vs Return. We have created a nifty calculator to help calculate your ROAS easily.
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Calculate your Return on Ad Spend (ROAS) with this free online calculator. Simply enter the required data points and click calculate. You’ll get an instant overview of your campaign ROAS as a result.
Your Return on Ad Sales is 10.00%
What is ROAS (Return on Ad Spend)?
Return on Ad Spend (ROAS) is a metric describing how much revenue you've earned based on your advertising budget. If your ROAS is 400%, for example, you have generated 4x the amount you've spent in revenue.
How to calculate ROAS
Simply follow these four easy steps to calculate your Return on Ad Spend:
- Find out the total sales your ads generated, e.g.,
- Find out your total spend on ads, e.g.,
- Divide the total sales by your ad spend:
£100 ÷ £25 = 4.
- Express it as a percentage:
4 * 100 = 400%.
The ROAS formula
The Return on Ad Spend formula is as follows:
ROAS = 100 * total ad revenue / total ad spend. If you can’t measure the direct sales revenue, you can use this formula instead:
ROAS = number of ad conversions * average number of sales conversion * average sales price – total ad spend.
What is a good ROAS?
There's no universally 'good' ROAS, and your return will differ by industry. In other words, your benchmark depends on what products you sell and who your competitors are. The higher your ROAS, the better. As a rule of thumb, your ROAS should be at least 250%, with the goal to be at 600% or above. The higher the better ofcourse!
What should I be reaching for?
An important point to remember is what is your objective? ROAS can be applied to both online sales and lead generation. Sales by working out your numbers above, whilst Lead generation you may have to figure out how much those conversions are worth to you. Then find out what your total lead conversion value is to apply the above calculation. There are many other objectives that can help increase your ROAS in which may entail some additional spend in other important areas of advertising such as brand awareness, traffic and reach campaigns that drive on impressions/clicks rather than purchases - this can help you get more data through to your tracking tools to remarket with high intent sales conversion campaigns.
Let us know if we can help
We offer Social and Search Advertising management to help you increase your ROAS and achieve your goals. If you would like to talk to one of the team about how it works, contact us here.
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