Enter your ad spend and attributed revenue for an instant ROAS — plus the break-even ROAS your margin actually requires and an incrementality-adjusted causal ROAS.
For the period you are measuring.
As the ad platform reports it.
Revenue left after cost of goods.
Share of that revenue you would have earned anyway.
Above break-even. At $10,000 spend and 60% margin, contribution after ad cost is about $11,000. After a 40% haircut the causal ROAS is nearer 2.10×.
The calculator gives you the number instantly. Leave your email and we will look at your actual accounts and send back what we would change first.
Return on ad spend (ROAS) is the ratio of revenue attributed to advertising to the money spent to earn it. It is the single most quoted number in performance marketing, and also the most misread. ROAS tells you how efficiently spend converted into tracked revenue. It does not tell you whether you made a profit, whether those sales were incremental, or whether you could have spent more and still come out ahead.
The formula is simple: ROAS = attributed revenue ÷ ad spend. A 3.5× ROAS means every dollar of spend returned $3.50 in revenue. Because it is a ratio rather than a percentage, a higher number is better, and a ROAS below 1× means the campaign returned less revenue than it cost — before you have even accounted for the cost of the product itself.
The most important companion to ROAS is break-even ROAS, and it comes entirely from your gross margin. Break-even ROAS = 1 ÷ gross margin. If your gross margin is 60%, your break-even ROAS is 1 ÷ 0.60 ≈ 1.67×. Every advertising dollar has to return at least $1.67 in revenue to cover the cost of goods on that sale. Below that line, each additional sale loses money.
This is why a target ROAS pulled from a blog post is dangerous. A widely-shared "aim for 4× ROAS" rule is punishing for a 70%-margin software business (which breaks even under 1.5×) and dangerously optimistic for a 20%-margin reseller (which needs 5× just to break even). Always derive your target from margin, then set the campaign floor a comfortable distance above it to leave room for overhead, returns, and the sales tax of running a business.
Platform-reported ROAS is almost always higher than the truth, because ad platforms claim credit for conversions they merely witnessed. Someone who was already going to buy searches your brand name, clicks the ad instead of the organic result, and the platform books the full sale as ad-driven revenue. Retargeting is the clearest example: showing an ad to a cart-abandoner who would have returned anyway inflates reported ROAS without adding a single incremental dollar.
Incremental ROAS discounts reported revenue to estimate the sales the advertising actually caused. The size of the haircut depends on the channel and tactic: brand search and retargeting typically warrant the largest discounts, while cold prospecting on a new audience is usually closer to fully incremental. The calculator applies a single blended haircut so you can see the gap; a proper incrementality read uses geo holdouts or conversion-lift studies to measure it per campaign.
Say you spend $10,000 on Meta in a month and the platform reports $35,000 in attributed revenue. Reported ROAS is 3.5×. Your gross margin is 60%, so break-even ROAS is about 1.67× — you are comfortably above it, and contribution after ad cost is roughly (35,000 × 0.60) − 10,000 = $11,000.
Now apply a 40% incrementality haircut, because a large share of that spend went to retargeting and brand-adjacent audiences. Incremental ROAS drops to 3.5 × 0.60 = 2.1×. Still above break-even, but the real contribution is closer to (21,000 × 0.60) − 10,000 = $2,600. Same campaign, very different decision about whether to scale — and you only see it when you look past reported ROAS.
Optimizing to a single blended ROAS hides the mix: a healthy blended number can be one wildly profitable brand campaign carrying several unprofitable prospecting campaigns. Break ROAS out by campaign type and audience temperature before you act on it.
Chasing maximum ROAS starves growth. The highest-ROAS dollar is almost always the last retargeting or brand dollar; pouring budget there lifts the ratio while shrinking the business. Treat target ROAS as a floor that protects profitability, then optimize for incremental new-customer revenue within it.
Ignoring the payback window matters for subscription and repeat-purchase businesses, where first-order ROAS understates value. If lifetime value justifies a lower first-purchase ROAS, plan spend against LTV, not the opening transaction alone.