ROAS (Return On Ad Spend) is an indicator of the payback of advertising expenses, i.e., the gain that you get for every 1$ unscrewed in a promotional venture. It may not take the costs of doing business. The online ROAS calculator counts the coefficient and the percentage of return on investments. Thus, you can determine the amount of income per conventional unit invested (regardless of currency) and evaluate the productivity of a particular activity/group/ad or even a key indicator.
How to Calculate ROAS?
The formula for counting ROAS is the following:
ROAS = income/expensesIf you need it in %, then:ROAS = income/expenses х 100%The calculator shows:
- revenue - the total amount that was received due to the advertising campaign;
- expenses - marketing promotional venture costs.
Nota bene: Take into account the budget for launching and maintaining campaigns when counting the indicators. But do not include additional costs such as payment for the services of a designer, a copywriter, PPC professionals and others, and delivery and the cost of the product.
An example of ROAS calculator Facebook: you spent $500 on promotion and SMM optimization of the company's official social media profile. This action provided 200 registrations for $5 each. Comings from the advertising campaign are as follows: 200 × $5 = $1000. Now let's count the payback rate of advertising: $1000 / $500 = $2. This means that 1 dollar spent on advertising brought you $2 of profit. A good ROAS indicator is more than 1.
ROAS is an extremely important indicator. First, it gives the way to figure out the profitability/unprofitability of a promotional venture if you do not have data on the difference between price and cost (marginality) and the ROI index. Second, you can count at what ratio the campaign will achieve the planned results or be at least self-sufficient (go to zero). Third, this indicator is easy to find using web tools like the online ROAS calculator.