"₹20,000 spent, ₹1,10,000 in sales — 5.5× ROAS!" is the sentence that gets a campaign renewed, and it can still be a loss-making campaign. Return on ad spend is revenue from ads divided by ad cost; it is the right metric for comparing campaigns and audiences, and the wrong one for deciding profitability unless you know your margin. This calculator computes ROAS, the break-even ROAS your margins require, and the profit (or loss) the campaign actually produced, for Meta, Google, marketplace and influencer spend.
The formulas
- ROAS = Revenue attributed to ads ÷ Ad spend. ₹1,10,000 ÷ ₹20,000 = 5.5× (or 550%).
- Break-even ROAS = 1 ÷ Gross margin. At a 35% gross margin, you need 2.86× just to cover product cost and the ad; at 20%, 5×.
- Profit = Revenue × Gross margin − Ad spend − Other variable costs. For the example at 35% margin: 38,500 − 20,000 = ₹18,500 before shipping, fees and returns.
Include GST on ad invoices as a cost unless you claim it as ITC, and use revenue excluding GST — otherwise ROAS is inflated by 5–18%.
How to use the calculator
- Enter ad spend for the campaign or period (include agency fees and creative cost if you want fully loaded ROAS).
- Enter revenue attributed to the ads (from the platform's conversion report, coupon codes or UTM-tagged orders), excluding GST.
- Enter gross margin % (from the gross margin calculator) and, optionally, other variable costs per order — shipping, payment fees, marketplace commission.
- Read ROAS, break-even ROAS and campaign profit; compare across campaigns in table mode.
- Convert to ROI and CAC with one click to see the same campaign three ways.
Reading platform-reported ROAS
- Attribution windows (7-day click, 1-day view) overstate revenue; orders that would have happened anyway get counted.
- Marketplace ads (Amazon/Flipkart sponsored products) report ACoS — the inverse of ROAS (ACoS 20% = 5× ROAS).
- Blended ROAS (all revenue ÷ all ad spend) is the honest check when attribution is messy.
- New vs returning: a 6× ROAS on retargeting existing customers is cheap revenue but not growth; segment it.
Improving ROAS
- Creative and offer move ROAS more than bidding: better photos (background remover, photo resizer) and a clear first line (social post generator).
- Landing page: a WhatsApp click-to-chat ad converts higher than a website for many local businesses; use the WhatsApp direct link.
- Price and margin: a product with a 45% margin tolerates 2.2× ROAS; the same spend on a 20% margin product needs 5×. Choose what you advertise with the seller pricing workflow.
- Cut the losers weekly; scale the winners slowly (20–30% budget steps).
- Watch the funnel after the click with the marketing funnel calculator.
Seasonal campaigns need a plan before the spend — the eight-week timeline is in Festive season 2026 checklist — and which AI ad tools are worth paying for is covered in AI for the small shop in 2026.
Related tools
- ROI calculator — profit-based return on the campaign.
- CAC calculator — cost per new customer from the same spend.
- Gross margin calculator — the margin that sets break-even ROAS.
- Marketing funnel calculator — conversion after the click.
- Engagement rate calculator — for organic content alongside ads.
- Referral rate calculator — the channel with no ad spend at all.