Enter your ad spend and revenue to calculate ROAS, profit margin, and whether your campaigns are actually profitable after cost of goods.
ROAS (Return on Ad Spend) = Revenue / Ad Spend. A ROAS of 4 means you earned $4 in revenue for every $1 spent on ads. ROAS measures revenue, not profit — you need to factor in your gross margin to determine actual profitability.
Your break-even ROAS = 1 / gross margin %. If your margin is 40%, you break even at 2.5x ROAS. Target 30–50% above break-even as your profitability target. For a 40% margin business, that means targeting 3.5x–4x ROAS.
If you run a service business (HVAC, dental, legal, roofing), tracking revenue from specific ad clicks is difficult. Use cost-per-lead (CPL) instead. Multiply your CPL by your average close rate and deal size to calculate your effective ROAS.
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