Revenue Maths: Calculator
ROAS and break-even ROAS calculator
Find your return on ad spend and the ROAS your margin needs to break even, so you know whether your ads make money or just make revenue.
Starting values are a worked example for a service business. Replace them with your own numbers.
Profitable. You clear break-even by 0.74x.
How it's calculated
ROAS = revenue from ads ÷ ad spend. Break-even ROAS = 1 ÷ gross margin. Profit after ad spend = revenue × gross margin − ad spend.
Next: see what each booked job costs with the cost per booked job calculator.
Questions
What is ROAS?
Return on ad spend: the revenue your ads produced divided by what you spent on them. $18,000 of revenue from $5,000 of ads is a ROAS of 3.6x.
What is break-even ROAS?
The ROAS at which ad spend exactly equals the gross profit it brings in. It is 1 divided by your gross margin, so a 35% margin needs a ROAS of about 2.86x just to break even.
What is a good ROAS?
Any ROAS above your break-even figure is profitable, so the answer depends on your margin. A 4x ROAS is excellent at a 50% margin and loses money at a 20% margin. Work out your break-even first.
Should service businesses use ROAS?
Yes, but track it on jobs that actually went ahead, at invoice value, not on enquiries or quotes. For a fuller picture of what each job costs, use the cost per booked job calculator.
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