In short: ROAS = revenue from ads ÷ ad spend. ROI = (profit − cost) ÷ cost. A high ROAS can still mean a loss if your margin is small. What matters is the break-even ROAS.
Last updated:
ROAS (Return on Ad Spend) says how much revenue €1 of ads brings. ROAS 4 means €4 of revenue per €1 of ads.
ROI (Return on Investment) relates profit to the amount invested. It includes costs, ROAS does not.
Basket €60, contribution margin €30: the break-even ROAS is 2. A ROAS of 3 makes a profit, a ROAS of 1.5 makes a loss, although both “bring revenue”.
For ad decisions, ROAS compared to break-even ROAS. For overall evaluation, ROI.
Basket ÷ contribution margin per order. The ROAS calculator does it for you.
The matching calculator runs in your browser. No sign-up, nothing is saved.
ROAS and Break-even CalculatorThe Shopify Launch Bundle: design, tracking, automations and SEO from one source, with a written fixed price.
See the Shopify Launch Bundle