How do you calculate ROAS?
Calculating your ROAS is simple! Follow these steps:
- Divide the total revenue from your ads by the total cost of the ad campaign.
- Multiply the result by 100 to get your ROAS as a percentage.
Example:
- If you spend $100 on an ad campaign and make $500 in revenue:
- $500 ÷ $100 = 5
- Then multiply 5 by 100 to get 500% ROAS.
For an even easier way to calculate it, use our free ROAS calculator below!
ROAS Calculator
What is a good ROAS for an ad campaign?
A good ROAS is usually at least 4, or 400%. This means for every dollar you spend, you should try to make $4 back. However, what’s considered "good" can change depending on your business and how much it costs you to do your work.
If your costs are high, you might need a higher ROAS to make a profit. For example, if your costs are big, a ROAS under 400% might not give you enough money to cover those costs and still make a profit.
What is the difference between ROAS and ROI?
ROI (Return on Investment) is used for all types of business investments. It looks at how much money you make compared to how much you spend in general.
ROAS (Return on Ad Spend) is just for marketing campaigns. It focuses on the money you make from ads compared to how much you spent on them. So, while ROI is bigger picture, ROAS is all about your ads!
How can you improve your ROAS?
To improve your ROAS, try these tips:
- Target the right audience: Make sure your ads reach the people most likely to buy your product or service. Use audience targeting to focus on the right age, location, and interests.
- Optimize your ads: Make your ads eye-catching and relevant. Use clear, strong calls to action and test different versions of your ads to see which one performs best.
- Adjust your budget: If you see some ads are doing better than others, consider increasing the budget for the top-performing ads and reducing spend on the ones that aren’t working as well.
- Track and analyze performance: Regularly check how your ads are doing. Look at the data and adjust your strategies if needed, like changing your ad copy or targeting.
- Use high-converting landing pages: Make sure the page your ad leads to is easy to navigate and designed to encourage visitors to take action, like making a purchase.
