Ad Spend ROI Calculator

Ad Spend ROI is evaluated from Total Ad Spend, Revenue Attributed to Ads and Cost of Goods Sold%. The calculation reports ROAS, Advertising ROI and Gross Profit from Ads.

Results

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About the Ad Spend ROI Calculator

Ad Spend ROI is treated here as a quantitative relation between Total Ad Spend, Revenue Attributed to Ads, Cost of Goods Sold% and Other Campaign Costs and ROAS, Advertising ROI, Gross Profit from Ads and Net Profit After All Ad Costs.

The calculator uses a multi formula configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
ROAS = ad revenue / ad spend
ROI = (revenue - COGS - all costs) / all costs x 100
Break-even ROAS = 1 / gross margin%
Gross Profit = revenue x (1 - COGS%)

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

ROAS = ad revenue / ad spend
ROI = (revenue - COGS - all costs) / all costs x 100
Break-even ROAS = 1 / gross margin%
Gross Profit = revenue x (1 - COGS%)

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: E-commerce Google Shopping: $6,200 spend, $31,000 revenue, 42% COGS, $400 in tools

Inputs

ad_spend: 6200 revenue: 31000 cogs_pct: 42 other_costs: 400
ROAS: 5 x. Advertising ROI: 172.4%. Gross Profit from Ads: $17,980. Net Profit After All Ad Costs: $11,380. Break-Even ROAS: 3.16 x

With Total Ad Spend = 6,200, Revenue Attributed to Ads = 31,000, Cost of Goods Sold% = 42 and Other Campaign Costs = 400 as the stated inputs, the result is ROAS = 5 x, Advertising ROI = 172.4% and Gross Profit from Ads = $17,980. Each value corresponds to the declared output fields.

Example 2: Facebook ads: $12,000 spend, $48,000 revenue, 55% COGS, $2,000 agency fee

Inputs

ad_spend: 12000 revenue: 48000 cogs_pct: 55 other_costs: 2000
ROAS: 4 x. Advertising ROI: 54.3%. Gross Profit from Ads: $21,600. Net Profit After All Ad Costs: $7,600. Break-Even ROAS: 3.37 x

With Total Ad Spend = 12,000, Revenue Attributed to Ads = 48,000, Cost of Goods Sold% = 55 and Other Campaign Costs = 2,000 as the stated inputs, the result is ROAS = 4 x, Advertising ROI = 54.3% and Gross Profit from Ads = $21,600. Each value corresponds to the declared output fields.

Example 3: Google Search Ads — lead generation: $3,500 spend, $28,000 revenue (from converted leads), 20% COGS (service business), $0 other

Inputs

ad_spend: 3500 revenue: 28000 cogs_pct: 20 other_costs: 0
ROAS: 8 x. Advertising ROI: 540%. Gross Profit from Ads: $22,400. Net Profit After All Ad Costs: $18,900. Break-Even ROAS: 2.6 x

With Total Ad Spend = 3,500, Revenue Attributed to Ads = 28,000, Cost of Goods Sold% = 20 and Other Campaign Costs = 0 as the stated inputs, the result is ROAS = 8 x, Advertising ROI = 540% and Gross Profit from Ads = $22,400. Each value corresponds to the declared output fields.

Example 4: Unprofitable ad campaign: $15,000 spend, $30,000 revenue, 65% COGS, $3,500 agency

Inputs

ad_spend: 15000 revenue: 30000 cogs_pct: 65 other_costs: 3500
ROAS: 2 x. Advertising ROI: -43.2%. Gross Profit from Ads: $10,500. Net Profit After All Ad Costs: $8,000. Break-Even ROAS: 2.53 x

With Total Ad Spend = 15,000, Revenue Attributed to Ads = 30,000, Cost of Goods Sold% = 65 and Other Campaign Costs = 3,500 as the stated inputs, the result is ROAS = 2 x, Advertising ROI = -43.2% and Gross Profit from Ads = $10,500. Each value corresponds to the declared output fields.

Common Use Cases

  • Calculate ROAS from ad spend and revenue
  • Determine if ad campaigns are profitable
  • Compare ad ROI across Google, Facebook, and other channels