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ROAS Calculator

The ROAS Calculator divides revenue by ad spend to give you return on ad spend — the core efficiency metric for any paid media campaign tied to revenue outcomes.

Paid Media Metrics: Key Terms, Formulas, and Definitions

Spend

Spend is the net advertising cost — the hard cost of media only. This does not include management fees, creative production, or any other service fees.

Impressions

Impressions are the number of times an ad was shown in a given channel — the total volume of ad views delivered by the advertising spend.

Cost-per-thousand Impressions (CPM)

CPM is the cost of purchasing 1,000 impressions. It is the standard buying metric for display, programmatic, and streaming TV advertising. Formula: (Spend ÷ Impressions) × 1,000 = CPM

Click-through Rate (CTR)

CTR is the rate at which impressions result in a click. If 1,000 ads are shown and 10 people click, the CTR is 1%. Formula: Clicks ÷ Impressions = CTR

Clicks

Clicks are the total number of times an ad was clicked. The click metric is also commonly used as a proxy for website sessions driven by paid advertising.

Cost-per-click (CPC)

CPC is the average advertising cost paid per click. Formula: Spend ÷ Clicks = CPC

Conversions

Conversions are the total number of desired actions — sales, leads, form submissions, downloads, or other defined goals — attributed to the advertising spend.

Conversion Rate

Conversion rate is the percentage of clicks that result in a conversion action — a lead, purchase, download, or other defined goal. Formula: Conversions ÷ Clicks = Conversion Rate

Cost-per-acquisition (CPA)

Cost-per-acquisition (CPA), also called cost-per-conversion, is the average amount of advertising spend required to generate one conversion action. Formula: Spend ÷ Conversions = CPA

Return on Ad Spend (ROAS)

ROAS measures how much revenue is generated per dollar of advertising spend. A 4x ROAS means $4 in revenue for every $1 spent — but profitability depends on your margin. Formula: Revenue ÷ Spend = ROAS

Markup

Markup is the percentage added above the cost of a product to arrive at the selling price. It is calculated relative to cost, not revenue — which is the key distinction between markup and margin. Formula: (Selling Price − Cost) ÷ Cost = Markup %

Margin

Gross margin is the percentage of revenue retained after deducting the cost of goods sold. Unlike markup (which is based on cost), margin is calculated relative to revenue — the number that ties directly to advertising profitability targets. Formula: (Revenue − Cost) ÷ Revenue = Margin %

Revenue

Revenue is the total income generated from sales before any costs are deducted. In paid media analysis, revenue attributed to advertising spend is the numerator in ROAS calculations.

Budget

Budget is the total advertising spend allocated to a campaign or channel for a defined period. Budget planning typically begins with a target CPA or ROAS and works backward from desired conversion volume.