Calculating Return on Ad Spend (ROAS)
A Free Guide and Calculator
Return on Ad Spend (ROAS) is one of the most important metrics for evaluating the success of your advertising campaigns. It tells you how much revenue you generate for every pound you spend on ads, making it an essential tool for optimising your marketing budget and driving business growth. Whether you’re running pay-per-click (PPC) campaigns, social media ads, or display advertising, ROAS provides the clarity you need to understand what’s working and where to invest more.
To make this easier for you, we’ve embedded a Free ROAS Calculator below. Simply enter your ad spend and revenue figures to calculate your ROAS in seconds. But first, let’s explore what ROAS is, why it’s important, and how you can use it to improve your advertising strategy.
What is Return on Ad Spend (ROAS)?
ROAS measures the revenue generated for every pound spent on advertising. The formula for ROAS is straightforward:
If you spend £1,000 on an ad campaign and generate £5,000 in revenue, your ROAS would be:
This means for every pound you spent on advertising, you earned £5 in revenue. A higher ROAS indicates a more effective campaign, while a lower ROAS suggests the need for optimisation.
The Free Return on Ad Spend (ROAS) Calculator
Now that you understand the importance of ROAS, use our Free ROAS Calculator below to quickly measure the effectiveness of your advertising campaigns. Simply enter your ad spend and the revenue generated from those ads, and the calculator will do the rest.
Return on Ad Spend (ROAS)
ROAS: -
Why is ROAS Important?
- Evaluate Campaign Performance
ROAS gives you a clear snapshot of how well your advertising campaigns are performing in terms of revenue generation. - Optimise Budget Allocation
By tracking ROAS across different campaigns and platforms, you can identify the most profitable channels and allocate your budget accordingly. - Set Goals and Benchmarks
ROAS helps you set realistic performance benchmarks and measure your campaigns against them. - Justify Advertising Spend
Demonstrating a strong ROAS allows you to show stakeholders the tangible value of your ad spend and secure future budgets.
How to Use ROAS for Decision-Making
ROAS is most valuable when used alongside other metrics, such as Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC). For example:
- If ROAS is high but CLV is low, you might be driving one-off sales without retaining customers.
- If ROAS is low but CAC is also low, you might still be acquiring customers efficiently.
Tracking ROAS regularly allows you to assess not only campaign performance but also the overall effectiveness of your marketing funnel.
We hope that our free ROAS Calculator below to quickly measure the effectiveness of your advertising campaigns.
By monitoring and optimising your ROAS, you’ll be able to maximise your advertising returns, refine your campaigns, and drive sustainable growth for your business.
