What is ROAS?
Return on ad spend (ROAS) tells you how much revenue your advertising brings in for every shilling spent. It is the quickest way to judge whether a campaign on Meta, Google or TikTok is pulling its weight — but on its own it can mislead, because revenue is not profit. That is why this calculator also asks for your gross margin.
The formula
ROAS = Revenue from ads ÷ Ad spend
Break-even ROAS = 1 ÷ Gross margin
Profit after ads = Revenue × Margin − Ad spend
How to use the calculator
Enter the total you spent on ads over a period, the revenue you can attribute to those ads over the same period, and your gross margin. Results update as you type. If your ROAS is above the break-even figure, the campaign is covering its cost of goods and its media; below it, you are effectively paying customers to buy from you.
Worked example (hypothetical numbers)
Imagine a Nairobi skincare shop spends KES 50,000 on Instagram ads in a month and tracks KES 200,000 in sales to them. ROAS is 200,000 ÷ 50,000 = 4x. With a 40% gross margin, break-even ROAS is 1 ÷ 0.40 = 2.5x. Profit after ads is 200,000 × 0.40 − 50,000 = KES 30,000. The campaign works — and there is room to test a higher budget.
Getting accurate inputs
ROAS is only as good as your attribution. Make sure the Meta Pixel or Conversions API, Google tag and TikTok pixel are installed, and that M-Pesa or WhatsApp orders are tagged back to campaigns where possible (for example with unique promo codes or tracked links). Compare like-for-like periods, and remember that some ad-driven sales happen days later.
Frequently asked questions
What is a good ROAS?
There is no universal number. A good ROAS is one above your break-even ROAS, which depends on your margin. A business with 25% margins needs at least 4x; one with 70% margins can be profitable at around 1.5x.
Is ROAS the same as ROI?
No. ROAS compares revenue to ad spend only. ROI compares profit to total investment, including product costs, fees and staff time.
Should I include agency fees in ad spend?
For a true picture, yes — or calculate it both ways. Media-only ROAS is useful for comparing campaigns; all-in ROAS tells you whether the channel is worth it.