I’ve updated the little ROAS calculator I built years ago, and the update fixes the biggest thing the original left out. The old version worked out your return on ad spend and let you set a target. What it couldn’t tell you was what that target should be, and the real answer depends on a number the calculator never knew: your margin.
Here’s the problem with ROAS on its own. A ROAS of 4, four pounds back for every one spent, sounds healthy, and most people treat it as a good result. Whether it’s actually profitable depends on what’s left after the cost of the product. At a 70% margin, a ROAS of 4 is making you good money. At a 20% margin, that exact same ROAS of 4 is losing you money on every order, and if you don’t know your break-even you’ll cheerfully scale it up, congratulating yourself on an “efficient” campaign that is steadily bleeding cash.
So the update adds a margin input, and with it two numbers that matter far more than raw ROAS. The first is your break-even ROAS, the point where a campaign neither makes nor loses money; below it you’re paying to give product away, above it you’re in profit, and every target ought to start there. The second is the ROAS you’d need to hit a set profit target, so “what do we need this to do” has a real figure behind it rather than a hopeful one.
Put your margin in and the calculator draws that line for you, in pounds. A campaign at 3.5 might be perfectly fine, and one at 5 might not be, depending entirely on what you sell and what it costs you to sell it.
It still won’t run your account for you. But it now answers the question the original couldn’t, the one that decides whether to spend more or less: are you actually in profit on this campaign? It’s at /roas-calculator/ if it’s useful.
