Free Digital Marketing Tools

ROAS Calculator

Return on Ad Spend (ROAS) is the average dollar amount each $1.00 invested in advertising returns to the business. ROAS can viewed as currency based metric, or percentage. Any output over $1.00, or 100% is a positive ROAS. This metric can be analyzed by the hour of the day, day of the week, device types and demographics to look for standout audience segments who contribute higher revenue amounts or order values, thus generating a higher return on ad spend.

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To calculate return on ad spend, enter the total advertising spend below and the total amount of revenue that resulted from the ad spend.

Digital Marketing Terms, Acronyms, Calculations and Formulas

Spend: Spend is the net advertising cost. This does not include management fees, creative or anything else - purely the advertising hard cost.

Impressions: Impressions are the amount of times ads appeared, or were shown, in the given channel. Essentially how many ads were served by the advertising spend.

Cost-per-thousand Impressions (CPM): CPM is how much it costs in net advertising spend to purchase 1,000 impressions. ((Spend / Impressions)*1000) = CPM

Click-through Rate (CTR): CTR is the rate at which impressions result in a viewer of the ad clicking on it. If 100 ads are shown and 1 person clicks, that is a 1% CTR. Clicks / Impressions = CTR

Clicks: Clicks are the amount of people who clicked on, or took an action on an ad. The click metric is also commonly associated with the number of website visitors.

Cost-per-click (CPC): CPC is the average amount paid in advertising spend per click on the ad. Spend / Clicks = CPC

Conversions: Conversions - which could be sales, leads, downloads, email opt-ins - is the total volume of conversion actions attributed to the ad spend.

Conversion Rate: Conversion rate is the rate at which a click turns into a conversion action such as a lead form submission, ebook download, email opt-in, sale, etc. Conversions / Clicks = Conversion Rate

Cost-per-conversion: Cost-per-conversion - often referred to as cost-per-acquisition (CPA) - is the average amount of advertising spend invested per resulting conversion action. Spend / Conversions = Cost-Per-Conversion

Return on Ad Spend (ROAS): ROAS is a measurement of how much revenue is returned per dollar spent. This can be expressed as a percentage, or a dollar amount. Revenue / Spend = ROAS

Markup: Markup is the difference in price between what a business pays for a product (cost) and what a buyer pays for that same product. Markup is based on the cost of goods paid by the business. Markup is the net revenue amount the business will keep.

Margin: Margin is the difference in price between what a business pays for a product (cost) and what a buyer pays for that same product. Margin is the gross revenue percentage the business keeps.