The ROAS formula is short: revenue from the ads divided by what you spent on them. A campaign that brought in $4,000 on $1,000 of spend has a ROAS of 4.0. The formula is easy. Reading the number is where media buyers lose money. ROAS is not profit. Every platform counts revenue its own way. And the ROAS you need depends on your margin, not on a benchmark.
This post walks through the formula and how Meta and Google display it, with three worked examples. It then covers the difference between ROAS and ROI, the break-even ROAS your margin sets, and why Meta's ROAS, Google's ROAS and your store's revenue never agree. I run Meta and Google accounts every week and I build Adsap, which shows ROAS on its dashboard. Every claim below has a source at the end.
What is the ROAS formula?
ROAS (return on ad spend) = revenue attributed to the ads / ad spend.
Both numbers cover the same period and the same currency. The result is a ratio: how many dollars of revenue came back for each dollar spent.
The formula
ROAS = revenue from the ads / ad spend
Meta shows a multiple
4.0
$4 back for every $1 spent
Google shows a percentage
400%
the same ratio, times 100
Meta shows ROAS as a multiple. Its Purchase ROAS metric is "purchase conversion value divided by amount spent", and the value comes from the purchase events your pixel or Conversions API sends. Google shows the same ratio as a percentage. Its Target ROAS help page uses the example "$5 in sales / $1 in ad spend x 100% = 500%". That makes a ROAS of 4.0 on Meta a ROAS of 400% on Google. Multiply the multiple by 100 to get the percentage, or divide the percentage by 100 to get the multiple.
How to calculate ROAS, step by step
- Pick the period: a day, a week, a month, or the life of a campaign.
- Take the ad spend for that period from the platform. On Meta that is Amount spent; on Google it is Cost.
- Take the revenue the platform attributed to the ads over the same period. On Meta that is Purchases conversion value; on Google it is Conversion value.
- Divide revenue by spend.
- Compare the result with your break-even ROAS, covered below, not with an industry figure.
One week, one campaign
4,000 / 1,000 = 4.0
400% on GoogleThree worked examples, all with round numbers:
| Case | Ad spend | Revenue from the ads | ROAS | On Google |
|---|---|---|---|---|
| An online store, one campaign, one week | $1,000 | $4,000 | 4.0 | 400% |
| A lead-gen account that values a lead at $120 and got 50 leads | $2,500 | $6,000 | 2.4 | 240% |
| An agency, three accounts, one month | $12,000 | $30,000 | 2.5 | 250% |
The lead-gen row shows the one thing you must set up before ROAS means anything: a value per conversion. If your conversions carry no value, the platform reports a ROAS of zero, or nothing at all. Give each conversion a value, even a rough average, or use cost per lead instead.
ROAS vs ROI: the difference that costs money
ROAS compares revenue with ad spend. ROI compares profit with cost. The gap between them is your product margin, and it changes the verdict on the same campaign.
Take the store above at a ROAS of 4.0 with a 40% gross margin. $4,000 of revenue leaves $1,600 of gross profit. Subtract the $1,000 of ads and $600 remains. The return on the ad spend is 60%.
Now the same store at a ROAS of 2.0. $2,000 of revenue leaves $800 of gross profit. Subtract $1,000 of ads and the campaign lost $200. A ROAS of 2.0 reads as "double your money" and it lost money. That is why the next number matters more than any benchmark.
What ROAS do you need? The break-even formula
Break-even ROAS = 1 / gross margin.
Gross margin here means the share of the selling price left after the cost of goods and the other variable costs of an order: shipping, payment fees, packaging. At the break-even ROAS the ads bring in exactly enough contribution to pay for themselves.
A worked example. You sell a $50 product. Cost of goods is $25, shipping and fees are $5. Contribution per order = 50 - 25 - 5 = $20. Gross margin = 20 / 50 = 40%. Break-even ROAS = 1 / 0.40 = 2.5. The most you can pay for one purchase and still break even is the $20 of contribution.
Break-even ROAS = 1 / gross margin
A 40% margin needs a ROAS above 2.5 before the ads make any profit.
Two more readings of the same curve:
- A 70% margin (software, services, digital products) breaks even at a ROAS of about 1.4.
- A 25% margin (many consumer goods after shipping) breaks even at 4.0.
If you want profit, not break-even, take the margin you want to keep out first. To keep 10% of the price as profit at a 40% margin, the target ROAS is 1 / (0.40 - 0.10) = 3.3. The break-even ROAS calculator does this from your price and costs, and returns the max cost per purchase as well.
Why Meta's ROAS, Google's ROAS and your store disagree
Each platform counts the orders its own ads touched, inside its own window. Meta's help page puts it plainly. An action taken off your ad, such as a purchase on your website, is attributed back to the ad if it happened within a set number of days after someone viewed or clicked on it. Ads Manager shows those actions by default under the attribution setting on the ad set. In the Marketing API the default attribution windows are 7-day click and 1-day view. Google runs its own attribution on its own touchpoints.
One order can therefore appear in both reports. A customer clicks a Meta ad on Monday, searches your brand on Google on Wednesday and buys. Meta counts it inside its 7-day click window. Google counts the brand search. Your store counts one order.
Two platforms, one order
Blended
all revenue / all ad spend
The number your store reports, which two platform reports cannot add up to.
The fix is a second formula. Blended ROAS, sometimes called MER (marketing efficiency ratio), is all revenue divided by all ad spend across every channel, taken from your store's own numbers. Use platform ROAS to compare campaigns and ad sets inside one platform, where the counting is consistent. Use blended ROAS to judge whether the whole budget is paying off.
Five ways ROAS gets misread
- Comparing it with a benchmark instead of your margin. A "good ROAS" is any ROAS above your break-even. A 3.0 is a profit at a 70% margin and a loss at a 25% margin.
- Mixing periods. Attribution lags spend. Orders from Monday's clicks land through the following week, so a report cut on Monday evening understates ROAS, and one cut a week later overstates the last few days.
- Counting revenue the ads did not touch. Total store revenue over Meta spend is a blended ROAS, not a Meta ROAS. Label it as such.
- Reading ROAS on too little spend. At $40 of spend, one $200 order is a ROAS of 5.0 and no order is 0. Wait for enough orders to make the number stable before you act on it.
- Forgetting returns, refunds and fees. Platforms report gross purchase value. If 8% of orders come back, your real ROAS is 8% lower than the report.
Reading ROAS in Adsap
The Adsap performance dashboard shows ROAS per campaign, ad set and ad, for Meta and Google Ads, from yesterday's numbers. Breakdowns show where the revenue came from by placement, country, age and gender. The metrics guide lists how each figure is defined. Automation rules can watch ROAS and pause an ad set that falls under a floor you set, with the guardrails in the rules guide.
The same numbers are one question away in the AI copilot:
Show ROAS by campaign for act_123 over the last 14 days, and flag any campaign under 2.5.
For a quick check without an account, the free ROAS calculator turns revenue and spend into the multiple and the percentage, and the ROAS glossary entry keeps the short definition.
Frequently asked questions
ROAS = revenue attributed to the ads / ad spend, over the same period. Meta shows the result as a multiple, such as 4.0. Google shows it as a percentage, such as 400%.
Divide revenue by spend, then multiply by 100. $4,000 of revenue on $1,000 of spend is 4.0 as a multiple and 400% as a percentage. Google's Target ROAS uses the percentage form.
Any ROAS above your break-even ROAS, which is 1 divided by your gross margin. A 40% margin needs a ROAS above 2.5 to make any profit. Industry benchmarks ignore your margin, so they cannot tell you whether a campaign made money.
Each platform counts the orders its own ads touched inside its own attribution window, so both can claim the same order. Your store counts each order once. Divide total revenue by total ad spend for the blended ROAS.
Sources
- Meta Business Help Center, Purchase ROAS (return on ad spend): "purchase conversion value divided by amount spent". https://www.facebook.com/business/help/274294333328345
- Meta Business Help Center, About actions attributed to your ad: an off-ad action counts if it happened within a set number of days after a view or click. Ads Manager shows it by default under the ad set's attribution setting. https://www.facebook.com/business/help/458681590974355
- Meta for Developers, Ad Account Insights reference:
action_attribution_windowsdefault7d_click, 1d_view;purchase_roasdefinition. https://developers.facebook.com/docs/marketing-api/reference/ad-account/insights/ - Google Ads Help, About Target ROAS bidding: the "$5 in sales / $1 in ad spend x 100% = 500%" example. https://support.google.com/google-ads/answer/6268637
- Break-even ROAS = 1 / gross margin, and the target ROAS variant: the formulas behind Adsap's break-even ROAS calculator. The worked examples in this post use round numbers chosen for the arithmetic; none is a benchmark.
- Adsap docs, metrics guide and automation rules.