## ROAS Calculator

### ROAS Calculator

• 1

How much revenue did you make from the specific ad source? Input that info in the first form field.

• 2

How much money did you spend on the specific ad source? That info will go in the second form field.

• 3

After inputting your revenue derived and the cost of your ad source, you'll be able to reap the benefits of your new ROAS metric!

#### What is ROAS?

ROAS stands for return on ad spend.

The metric is extremely important to businesses who use paid ads as a strategy since it can help them understand how much return they generate in comparison to how much they spend on ads.

You can calculate ROAS manually with the ROAS formula mentioned below, or you can use a free ROAS calculator like the one we provide!

For example, if you made a \$200 sale on an ad, and you spent \$300 on the ad, your ROAS would be 67%. Initially, you might be satisfied with that number, but in reality, you didnâ€™t actually make a profit. In fact, you lost \$100.

#### Return on ad spend formula

Do you want to calculate ROAS percentage manually? If so, check out the ROAS formula below!

##### ROAS = (money gained from ads/money spent on ads) x 100

When you work through the ROAS formula, youâ€™ll end up with a ROAS percentage. This percentage expresses how much money you earn from ads in relation to how much money you spend on ads.

#### What is a good return on ad spend?

Pinning down a â€śgoodâ€ť ROAS is difficult, but in general, you want to have a ROAS that is over 100%. If you have a ROAS of 100%, you break even with your ad spend and your ad return.

#### Benefits of using a ROAS calculator

So what are the benefits of using a return on ad spend calculator?

There are a few!

Just like a person needs treatment when theyâ€™re sick, your ad campaign needs treatment if itâ€™s not producing desirable results. When we cough or have a fever, we know itâ€™s one of the first signs of illness. With ineffective ad campaigns, the first sign of â€śillnessâ€ť is a low ROAS, or like we said before, a ROAS that is less than 100%.

By diving into important ad campaign metrics like how much money your ads generate and how much you spend on ads, youâ€™ll be able to calculate ROAS percentage and gauge the health of your ad campaign overall.

If your calculated ROAS percentage is less than 100%, itâ€™s time to rethink your campaign. If itâ€™s more than 100%, keep doing what youâ€™re doing, but donâ€™t let off the gas.

2. It forces you to be aware
You canâ€™t use a return on ad spend calculator without important ad campaign metrics.

When you use a ROAS calculator, youâ€™ll be forced to dig up overlooked or ignored campaign metrics. For example, you might continually spend the same amount on your ad campaign every month but never actually stop to see what youâ€™re earning from that campaign.

One of the most important and long-lasting benefits of using a ROAS calculator is it forces you to be aware of important ad campaign metrics like spend vs. revenue.

3. You donâ€™t have to worry about miscalculations
A free ROAS calculator like the one we provide is a great way to ensure that you donâ€™t miscalculate a metric as important as ROAS.

With so many numbers involved, itâ€™s easy to miscalculate, and if you do, youâ€™ll end up with a misjudged ROAS and a misled ad campaign.

When you use a return on ad spend calculator, you guarantee an accurate result every time.

There are a number of factors that influence your ROAS including:

Targeting
Targeting allows you to reach your most qualified audience with your ads, and if you donâ€™t do it properly, you could be throwing your ad budget â€” and a good ROAS â€” out the window.

When you donâ€™t target the right audience, interested users wonâ€™t see your ads, which means you might be creating ads for your target audience and but youâ€™re delivering them to another, less interested, audience.

To target properly, be sure that you select and bid on keywords that your audience searches for.

Youâ€™ll also want to pay attention to whether you target short tail keywords or longtail keywords.

Short tail keywords are typically made up of one or two words and they target a very broad audience, whereas longtail keywords are longer, more detailed phrases that target an ultra-specific audience.

Youâ€™ll pay more for short tail keywords since they target that wide range of users, and youâ€™ll typically pay exponentially less for long-tail keywords.

Hereâ€™s a breakdown of each keyword type:

• Short tail keywords: They cost more and youâ€™ll rarely make a sale from ads that target these keywords. They cost more since a lot of companies want to earn sales from these broad keywords, and it's hard to actually make a sale since users searching for these keywords likely arenâ€™t ready to make a purchase anyway.

• Longtail keywords: They cost less and youâ€™ll likely make sales from ads that target these keywords. They cost less since fewer companies offer the super specific product or service youâ€™re targeting, and itâ€™s easy to make a sale since users searching for these keywords are likely ready to convert once they find what theyâ€™re looking for.

Cost per click
Whether your cost per click (CPC) is too high or too low, neither bodes well for your ROAS.

If your CPC is too low, your ads might not reach to your target audience since you might not win the bidding auction for that specific keyword. And if itâ€™s too high, your ads might reach the right audience (pending correct targeting), but you throw away your ad budget.

The best way to achieve a positive ROAS and an ideal CPC is to work with a full-service digital marketing agency like WebFX. Our team knows the ins and outs of achieving your perfect CPC and in turn, helping you reach your goal ROAS.

Landing page
Your landing page is the last, make or break element of an ad. Users see this page last before converting, so you must make it enticing, exciting, and engaging.

If you create less-than-desirable landing pages that donâ€™t offer a clear CTA, information about your product, or the product price, you can kiss a sale and an increased ROAS goodbye.

Itâ€™s crucial that you create landing pages that turn skeptical shoppers into loyal customers. Include these landing page must-haves to increase chances of a sale:

• CTA
• Product price
• Product materials
• Product measurements
• Size options
• Color options
• Product images
• Product description
• Return policy
• Reviews

WebFX is a digital marketing agency that specializes in creating ad campaigns that produce the highest return possible.

When you create paid ads for your business, you donâ€™t want them to fall on deaf ears â€” the goal is to earn more money back than you spend on your ads. This isnâ€™t easy, but with the ad experts at WebFX, it doesnâ€™t have to be difficult.

Not to mention, weâ€™ll keep an eye on your campaign analytics so that you always know how your campaigns perform and how small changes create big results.

If youâ€™re ready to get started with a campaign that increases your ROAS, WebFX canâ€™t wait to hear from you. Contact us online or give us a call at 888-601-5359!

#### How do I calculate my break-even ROAS?

Before you can calculate your break-even ROAS, you need to know your average profit margin percentage. To calculate your average profit margin, use this formula:

##### Average Profit Margin = Average Order Value â€“ Average Order Cost

Next, you can use this formula to calculate your average profit margin percentage:

##### Average Profit Margin % = (Average Profit Margin / Average Order Value) X 100

Now that you know your average profit margin percentage, you can calculate your break-even ROAS with this formula:

##### Break-even ROAS = 1 / Average Profit Margin %

For example, if your average profit margin percentage is 50%, your break-even ROAS is 200% using the formula above. As a result, youâ€™ll break even at 200% ROAS. If your ROAS is below this number, youâ€™re losing money on your ads.

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