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Miraç Özdemir
Digital Marketing Metrics

ROAS and ACoS Calculator (Return on Ad Spend)

Calculates ROAS, ACoS, break-even ROAS/ACoS and profit after ad spend from ad spend and ad revenue, showing whether a campaign is profitable.

Version 1

Things to keep in mind:

  • The gross margin should already include product cost, marketplace commission, shipping and returns, or break-even will be optimistic.
  • Repeat purchases (customer lifetime value) are not counted; see the CLV tool.
  • Platform attribution models and windows differ; enter ad revenue per the platform report definition.
  • VAT-inclusive versus exclusive revenue changes the result; do not mix them.

Calculator

Ad performance

TRY

Amount spent on advertising in the period (TRY).

TRY

Sales revenue attributed to the ads (TRY).

TRY

Optional: all sales, used for TACoS (ad spend / total revenue) (TRY).

Margin

Gross profit as a percentage of price before ads (after product cost, commission and shipping).

After the first calculation, the result updates automatically when you change a value.

Result

Enter the values and press Calculate to see the result here.

About this tool

ROAS (return on ad spend) shows how much sales you earn per 1 spent on advertising; ACoS is ad spend as a share of ad revenue. Comparing them with your gross margin shows whether the campaign actually makes a profit.

Formulas

  • ROAS = Ad revenue / Ad spend
  • ACoS (%) = Ad spend / Ad revenue × 100
  • Break-even ROAS = 100 / Gross margin (%) ; Break-even ACoS = Gross margin (%)
  • Gross profit from ads = Ad revenue × Gross margin / 100
  • Profit after ads = Ad revenue × Gross margin / 100 − Ad spend
  • TACoS (%) = Ad spend / Total revenue × 100

Amounts are rounded to cents and ratios to 2 decimals, half up (HALF_UP). Ad spend must be greater than zero. If ad revenue is 0 ACoS, if margin is 0 break-even ROAS, and if total revenue is not entered TACoS cannot be computed and shows 0. Enter revenue and margin on the same VAT-exclusive basis.

Example 1 (profitable): 10,000 spent for 50,000 of ad sales at a 40 % gross margin, with total revenue of 200,000: ROAS 5.00; ACoS 20.00 %; break-even ROAS 2.50; break-even ACoS 40.00 %; gross profit from ads 20,000.00, profit after ads 10,000.00; TACoS 5.00 %.

Example 2 (loss-making): 7,000 spent for 15,000 of ad sales at a 30 % gross margin gives ROAS 2.14; ACoS 46.67 %; break-even ROAS 3.33; gross profit 4,500.00 and profit after ads of −2,500.00. Because ROAS is below break-even ROAS, the campaign loses money.

How to read the result: ROAS should be high and ACoS low; they are inverses (ACoS = 1 / ROAS × 100). The real comparison is with the break-even values: when ROAS exceeds break-even ROAS (ACoS below break-even ACoS), the campaign covers the pre-ad margin and earns a profit; below it, every sale loses money. "Profit after ad spend" shows this in TRY. TACoS is spend relative to all sales and also reflects the effect of ads on organic sales. If the margin does not include product cost, commission, shipping and returns, break-even will look optimistic. Repeat purchases are not counted; see the customer lifetime value tool.

How to use

  1. Enter ad spend and the revenue attributed to ads.
  2. Enter your gross margin (%) before ads.
  3. Optionally enter total revenue for TACoS.
  4. Press Calculate.

Notes

Enter margin and revenue on the same basis (VAT-exclusive). With a 0 margin break-even ROAS is not computable and shows 0. Amounts are rounded to 2 decimals and ratios HALF_UP.

Sources

Frequently asked questions

5 questions

  1. ACoS = 1 / ROAS × 100. A ROAS of 5 equals an ACoS of 20 %; high ROAS and low ACoS are desirable. One gives the same information as a multiple, the other as a percentage.

Next step

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