What is ROAS and what is a good ROAS for your business

If you run digital ads, knowing what is ROAS is key to telling whether your campaigns work. ROAS (return on ad spend) measures how much comes back in sales for every unit you spend on ads. Google Ads explains it with an example: if you sell €5 for every €1 spent, your ROAS is 500%, or 5x. You can calculate yours with our ROAS calculator.

CLP 500,000

Ad spend

in the month

CLP 1,800,000

Sales generated

attributed to the campaign

3.6x

ROAS

CLP 3.6 in sales per CLP 1

Source: InfoByData calculation with a sample campaign

View the data as a table

Ad spend	CLP 500,000 | in the month
Sales generated	CLP 1,800,000 | attributed to the campaign
ROAS	3.6x | CLP 3.6 in sales per CLP 1

What is ROAS and how is it calculated

The formula is simple:

ROAS = revenue generated by the campaign ÷ ad spend

If you spent CLP 500,000 on Google or Meta and that campaign generated CLP 1,800,000 in sales, your ROAS is 3.6x. Google Ads also expresses it as a percentage: multiply by 100, so a 3.6x ROAS equals 360%.

What is a good ROAS: it depends on your margin

There is no single "good" ROAS for everyone. A 3x ROAS can be excellent for one company and a loss for another, because ROAS measures sales, not profit. What matters is whether sales cover the cost of the products and the ads.

The break-even ROAS is calculated like this:

Break-even ROAS = 1 ÷ margin

Your business margin	Break-even ROAS
20%	5.00x
30%	3.33x
35%	2.86x
50%	2.00x
70%	1.43x

InfoByData calculation. Margin is the share of the price that is profit after product cost.

With a 35% margin, the sample campaign (3.6x ROAS) is profitable, because it beats the 2.86x minimum. If you don't know your margin, work it out with our margin calculator or read how to calculate the selling price.

ROASFree toolFree ROAS calculator: measure your campaigns’ CPA, CPC and returnEnter your campaign’s spend, clicks, sales and revenue and get the ROAS, CPA, CPC, CTR and the minimum ROAS to avoid losing money.Use tool →

ROAS, CPA and CPC: the metrics that go with it

Knowing what is ROAS isn't enough: it's best read alongside other metrics.

Metric	Formula	What it tells you
CPC	Spend ÷ clicks	How much you pay per visit
CTR	Clicks ÷ impressions	How appealing your ad is
Conversion rate	Sales ÷ clicks	How well your site converts
CPA	Spend ÷ sales	How much each sale costs you
ROAS	Revenue ÷ spend	How much comes back per unit spent

If ROAS is low, these metrics show where the problem is: a low CTR points to the ad; a low conversion rate, to your site or offer. We explain more metrics in our article on marketing KPIs.

How to measure ROAS properly

To know what is ROAS for each campaign, you need to attribute sales correctly. Tag your ad links with our UTM link builder so Google Analytics records which campaign each sale comes from.