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ROAS & Ad Spend ROI Calculator

Calculate Return on Ad Spend (ROAS), Marketing Efficiency Ratio (MER), net profit, and true ROI from your advertising investment to optimize budget allocation.

Total advertising spend in the period.
Total revenue directly attributed to ads.
Cost of goods or services sold from ad-driven revenue.

Results

ROAS4.00x
Ad ROI150.0%
Net Profit$1,500.00
MER (Marketing Efficiency Ratio)1.60x

📖What is it?

ROAS (Return on Ad Spend) measures gross revenue generated per dollar spent on advertising. Unlike ROI, it ignores product costs � ROAS of 4x means $4 revenue per $1 spent, but profitability depends on your margins. MER (blended ROAS) measures all revenue against total marketing spend, giving a holistic view.

🎯How to use

1. Enter your total ad spend for the period. 2. Enter the revenue directly attributed to those ads. 3. Enter the COGS for the goods sold. The calculator derives ROAS, true net profit, ROI, and MER.

💡Example scenario

Ad spend: $1,000. Revenue: $4,000. COGS: $1,500. ROAS = 4x. Gross profit = $2,500. Net profit (after ad spend) = $1,500. ROI = 150%. MER = $4,000 / $2,500 = 1.6x. A healthy campaign since net profit is positive.

🏆Pro tip

Your break-even ROAS = 1 / gross margin. At 62.5% gross margin, break-even ROAS = 1.6x. Target ROAS should be 2�3x your break-even to cover operating expenses and generate profit. MER > 3 is the target for most DTC brands. Use MER for budget decisions and channel ROAS for campaign optimization � never use ROAS alone to judge profitability.