Know the Figures

Marketing Campaign Profit & ROAS

Whether a campaign made money after margin, returns and fees — not just what ROAS it hit.

Replaces: Agency ROAS reports

How to use it

Enter what the campaign cost in media and fees, the revenue credited to it, your gross margin and how much of that revenue comes back as returns. The result is whether it actually made money, the ROAS it needed to break even, and what each new customer cost. If you expect new customers to buy again, add your own estimate of that repeat gross profit to see how it moves the answer.

Where the number comes from

  • ROAS is attributed revenue divided by ad spend.
  • Revenue after returns is attributed revenue less the returns percentage. Gross profit is that times gross margin.
  • Campaign profit is gross profit less ad spend and fees. Return on campaign cost is that profit divided by spend plus fees.
  • Revenue needed to break even is (spend + fees) ÷ (gross margin × (1 − returns)). Break-even ROAS is that revenue divided by ad spend, so fees raise it even though they are not part of ROAS.
  • Cost per new customer is spend plus fees divided by the new customers acquired.
  • Profit including repeat purchases adds new customers × your repeat gross profit estimate. The calculator does not estimate repeat value; it only uses the figure you enter.
  • The table prices the same campaign at ROAS from 1× to 6×, with your campaign and the break-even point marked.

What goes wrong

The part most calculators leave out.

  • Attributed revenue usually overstates what the campaign caused. Last-click attribution credits ads for sales that would have happened anyway, and view-through attribution credits ads people barely saw. Platform-reported revenue is the most generous version.
  • ROAS measures revenue, not profit. A high ROAS on a low-margin product can lose money while a modest ROAS on a high-margin one is profitable; the break-even ROAS is the number to compare against.
  • Returns arrive weeks after the sale. Judging a campaign the week it ends counts revenue that will come back, so the returns rate entered should be the eventual rate, not what has come back so far.
  • Gross margin must include fulfilment, shipping and payment fees. Using product margin alone understates the break-even ROAS.
  • Repeat gross profit is your estimate, not a measurement. A large figure can turn any campaign profitable on paper, so check it against what past cohorts actually did.

A 3.5× ROAS that only just pays

A campaign costs 20,000 in ad spend and 3,000 in agency and creative fees, and is credited with 70,000 of revenue: a 3.5× ROAS. After 8% returns and a 45% gross margin, each 1 of revenue keeps only 0.41 of gross profit, so the campaign needs 55,556 of revenue to cover 23,000 of cost. That is a break-even ROAS of 2.78×, or 2.42× if the fees are ignored. It made 5,980, a 26% return on its cost, and each of its 400 new customers cost 57.50 to acquire.

Questions

What is a good ROAS?
One above your break-even ROAS, which depends on your gross margin, returns and fees. At a 45% margin with 8% returns break-even is around 2.4× before fees; at a 20% margin it is above 5×. A ROAS figure means nothing without the margin behind it.
How do I calculate break-even ROAS?
Divide 1 by the gross profit kept from each unit of revenue: gross margin × (1 − returns rate). To include fees, work out the revenue needed to cover spend plus fees, (spend + fees) ÷ (margin × (1 − returns)), and divide that by ad spend.
What is the difference between ROAS and ROI?
ROAS divides revenue by ad spend. ROI divides profit by the full cost, fees included. A campaign can show a ROAS of 3× and a negative ROI if margins are thin.
Should repeat purchases count?
If new customers reliably buy again, a campaign that loses money on the first order can still pay. Enter your own estimate of the gross profit from 12 months of repeat orders, based on what earlier customers actually did, and the calculator shows both figures side by side.
Does anything I type get sent anywhere?
No. The whole calculation runs in your browser. Nothing is sent to us or logged, and there is no account to create. Your browser keeps the figures with this tab’s history so that Back and Reload bring them back, and Reset clears them.

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