ROAS compares attributed advertising revenue with ad spend. ROI compares profit with the costs included in an investment. ROAS is useful for campaign reporting, but it does not tell you whether the business made a profit after other expenses.
A campaign can generate several euros of revenue for every euro spent on ads and still lose money.
How to calculate ROAS
ROAS = revenue attributed to ads ÷ ad spend.
If a campaign reports €6,000 revenue from €1,500 ad spend, ROAS is 4×, or 400%. Both formats express the same ratio.
The calculation depends on the revenue supplied. Check whether that figure includes taxes, shipping, refunds, and repeat purchases, and record the attribution window used.
How to calculate ROI
For a simplified campaign calculation:
ROI = (campaign revenue − included campaign costs) ÷ included campaign costs × 100.
Define those costs before calculating. Google’s ROI guide explains the need to consider costs alongside revenue.
Your analysis might include ad spend, cost of goods, fulfillment, payment fees, and creative production. The exact scope depends on the decision you are making. Label a calculation that excludes overhead as such rather than calling it the company’s final profit.
A worked example
Consider this fictional campaign:
| Item | Amount |
|---|---|
| Revenue | €6,000 |
| Ad spend | €1,500 |
| Product and fulfillment costs | €3,600 |
| Creative production | €400 |
| Total included costs | €5,500 |
ROAS is €6,000 ÷ €1,500 = 4×.
Profit within this cost scope is €6,000 − €5,500 = €500. ROI is €500 ÷ €5,500 × 100 = approximately 9.1%.
The ROAS sounds large because it compares revenue with only one cost category. The ROI calculation includes more of what it took to produce that revenue.
Why a “good ROAS” depends on the business
A high-margin digital product and a low-margin physical product do not have the same room for advertising costs.
Returns, discounts, shipping subsidies, and customer support can also change the result. A revenue ratio that worked before a promotion may no longer cover the reduced margin.
Use your actual cost structure to estimate break-even ROAS. Avoid borrowing a universal target from another business.
Attribution creates another limitation
Two advertising platforms can both claim credit for the same purchase. Adding their reported revenues together may overstate total sales influenced by advertising.
Compare platform reporting with your order records and analytics definitions. Treat attributed revenue as a measurement under stated rules, rather than proof of incremental revenue caused by the campaign.
Which number belongs in your report?
Use ROAS to discuss attributed revenue efficiency. Use an explicitly scoped profit or ROI calculation when deciding whether the economics work.
The ROAS calculator handles the revenue-to-spend ratio. For the ROI calculator, enter all costs you intend the result to include. Record those inputs beside the result so someone else can reproduce it.