ROAS Calculator

Return on Ad Spend (ROAS) measures how much money you get back for every £1 you put into advertising. So if you spend £1 on ads and it brings in £4 of sales, your ROAS is 4:1 (or "400%"). The higher the number, the better your ads are performing. A ROAS below 1 means you're spending more than you're making back. Use our free ROAS calculator for quick insights and a full calculator for a more detailed analysis.

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How to calculate ROAS

Understanding your Return on Ad Spend (ROAS) is essential for measuring whether your advertising is profitable. Our ROAS calculator works by dividing the revenue generated from your ads by the amount you spent on them.

If your ROAS is above 1, you’re generating more revenue than you’re spending, which is always a positive sign. This metric gives you a clear view of how effectively your campaigns are performing and helps guide future decisions.

In simple terms, ROAS shows how much revenue you earn for every pound spent on advertising, allowing you to make more informed and confident marketing choices.

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What is considered a good ROAS in ecommerce?

A “good” ROAS in ecommerce depends on your profit margins and business goals, but a common benchmark is around 3:1 meaning you earn £3 for every £1 spent on ads.

However, this can vary. If your margins are high, you might still be profitable with a lower ROAS. If your margins are tighter, you may need a higher ROAS (like 4:1 or more) to make a profit.

It also depends on your strategy. For example, you might accept a lower ROAS when gaining new customers, knowing they’ll bring more value over time. In short, a good ROAS is one that keeps your business profitable while supporting your growth.

How to improve ROAS

Improving ROAS comes down to making each pound you spend work harder.

One way to do this is by increasing the value of each sale, which could be through higher prices, bundles, or encouraging customers to spend more per order.

You can also improve ROAS by bringing people back, using retargeting on past visitors or customers, which often leads to better returns than constantly chasing new audiences.

And lastly, it's also worth tightening up your offers, including strong discounts, clear messaging, or added value, which can make your ads more effective without increasing spend.

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ROAS Calculator FAQs

Still need help understanding Return on Ad Spend (ROAS)? We've answered some of the most popular queries below.

For anything else, please get in touch and we'd be happy to help!

What is ROAS?

ROAS stands for Return On Ad Spend. It's a metric that shows how much revenue you generate for every pound you spend on advertising, calculated by dividing ad revenue by ad spend.

How to calculate ROAS

Just divide the revenue your ads generated by how much you spent on them.

For example, if you spent £500 on ads and they generated £2,000 in sales, your ROAS is £2,000 ÷ £500 = 4 (often written as 4:1).

That means for every £1 spent, you earned £4 back. A ROAS above 1 means you're profitable on ad spend alone; below 1 means you're losing money on ads (before accounting for other costs like product or overheads).

What impacts ROAS?

ROAS is shaped by a mix of campaign, website and business factors. On the advertising side, targeting accuracy, bidding strategy, ad quality and competition levels all affect how much you pay per click. On the website side, landing page experience, checkout friction and average order value determine how well that traffic converts into revenue. Pricing and profit margins also play a role, since a lower-margin product needs a higher ROAS to be profitable than a higher-margin one. Finally, how conversions are tracked and attributed can significantly change the ROAS figure you see, even if actual performance hasn't changed.

How to improve ROAS

Improving ROAS comes down to making every pound of ad spend work harder. Start by refining your targeting to reach higher-intent audiences and cut wasted spend on unqualified clicks. Test ad creative and copy to lift click-through and conversion rates and review your bidding strategy so budget flows toward your best-performing campaigns. On-site, a faster, clearer landing page and smoother checkout process can significantly boost conversion rate without spending any extra money. It's also worth looking at average order value and keeping tracking accurate so you're making decisions based on real performance.

Want a hand improving your ROAS? Get in touch with our digital marketing specialists. We'll review your account and show you where the quick wins are.

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