Calculate ROAS and POAS
Is your ad budget bringing in enough? Calculate your ROAS, your POAS and the break-even ROAS that matches your margin.
ROAS
3.72
372% · excl. VAT
POAS
1.67
- Break-even ROAS (excl. VAT)
- 2.22
- Break-even ROAS as your ad platform shows it (incl. VAT)
- 2.69
- Gross profit after ads
- €673.55
- Orders and cost per order
- 82 · €12.22
The formulas
- ROAS = revenue from ads / advertising costs
- POAS = gross profit from ads / advertising costs
- Break-even ROAS = 1 / gross margin. At a 45% margin: 1 / 0.45 = 2.22.
- Cost per order (CPA) = advertising costs / number of orders
Frequently asked questions
What is ROAS?+
ROAS (return on ad spend) is your revenue from ads divided by what you spent on them. €4,500 revenue from €1,000 of ads is a ROAS of 4.5 (or 450%). Check whether your revenue is including or excluding VAT: Google Ads and Meta often count the amounts as your webshop passes them on, usually including VAT.
What is a good ROAS?+
That depends on your margin. Your break-even ROAS is 1 / margin: with a 40% margin you need a ROAS of at least 2.5 (excluding VAT) to break even. With a 25% margin it’s already 4. So a "good ROAS" doesn’t exist separately from your margin.
What is POAS?+
POAS (profit on ad spend) divides your gross profit by your advertising costs instead of your revenue. A POAS above 1 means your ads bring in more margin than they cost. POAS is fairer than ROAS if you sell products with different margins.
Does shipping count towards the margin?+
For an accurate break-even ROAS, yes. Then use your margin after shipping, packaging and payment fees. You can work that out with the margin calculator.
Need help?
Fulfilment companies that can help you with this
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