Calculate Return on Ad Spend and key marketing metrics.
Inputs: Ad spend, revenue, cost of goods sold, customer lifetime value.
Ad spend must be ≥ 0.
Revenue must be ≥ 0.
COGS must be ≥ 0.
LTV must be ≥ 0.
Must be at least 1 customer.
Conversion rate must be between 0 and 100.
This ROAS calculator helps you measure the effectiveness of your advertising campaigns and understand key marketing metrics that drive business growth.
ROAS (Return on Ad Spend) measures how much revenue you generate for every dollar spent on advertising. A ROAS above 4:1 (400%) is generally considered good, meaning you earn $4 for every $1 spent.
These metrics help you optimize your marketing spend, identify profitable campaigns, and make data-driven decisions about scaling your advertising efforts.
What's a good ROAS?
A ROAS of 4:1 (400%) is generally considered good, but it varies by industry. E-commerce typically aims for 3:1 to 5:1, while SaaS might target 5:1 to 10:1. Consider your profit margins when evaluating ROAS.
How do I improve my ROAS?
Optimize ad targeting, improve landing pages, reduce ad costs, increase conversion rates, and focus on higher-value customers. Also consider your product pricing and customer lifetime value.
What's the difference between ROAS and ROI?
ROAS only considers ad spend vs. revenue, while ROI includes all costs (ad spend, COGS, overhead, etc.). ROAS is simpler but ROI gives a more complete picture of profitability.
Why is LTV:CAC ratio important?
LTV:CAC ratio shows if your customer acquisition is sustainable. A ratio below 1:1 means you're losing money on each customer. Aim for 3:1 or higher for healthy growth and profitability.
How do I calculate customer lifetime value?
LTV = Average Order Value × Purchase Frequency × Customer Lifespan. For subscription businesses, it's Monthly Recurring Revenue × Average Customer Lifespan. Use historical data or industry benchmarks.