Calculate Return on Ad Spend (ROAS), target ROAS, breakeven ad spend, and advertising profit.
Used to determine your Breakeven ROAS threshold.
For every $1 spent, you generated $4.00 in revenue
Revenue allocation
Comparing profitability across multiple spend levels at this ROAS.
| Ad Spend | Gross Revenue | Product Cost | Net Profit |
|---|---|---|---|
| $1,250.00 | $5,000.00 | $2,500.00 | $1,250.00 |
| $2,500.00 | $10,000.00 | $5,000.00 | $2,500.00 |
| $3,750.00 | $15,000.00 | $7,500.00 | $3,750.00 |
| $5,000.00 | $20,000.00 | $10,000.00 | $5,000.00 |
Revenue divided by advertising investment multiplied by 100 (or represented as a multiplier X).
$2,500 spent generating $10,000 in revenue with 50% product margins.
ROAS = ($10,000 / $2,500) = 4.0x (400%). Breakeven ROAS = 1 / 0.50 = 2.0x (200%).
ROAS = 4.00x (400%), Profitable above 2.00x breakeven
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