ROAS Calculator
Check if your ad spend is actually making money
A 6x ROAS looks great until you strip out VAT, returns, and fulfilment and realise you are barely breaking even. Plug in your real numbers and find out what is actually left.
ROAS & Profitability
Enter your ad spend and revenue, then add your cost structure. The waterfall shows where every pound actually goes.
Channel Comparison
Same cost structure, different channels. You will often find that the channel with the "worst" ROAS is still making you money.
The ROAS Trap
The thing most people get wrong: a very high ROAS usually means you are underspending, not that your ads are brilliant. Drag the slider and watch what happens.
A 7x ROAS feels like a win. The thing is, it usually means you are only reaching people who were going to buy anyway. Tom Roach calls this the "selection effect" - your ads look efficient, but they are not doing much actual work.
As you scale spend, you reach colder audiences. Conversion rates drop and ROAS falls. But total revenue and profit can keep rising because you are reaching genuinely new customers. The sweet spot is where the cost of the next customer equals what that customer is worth to you. Beyond that, each extra pound costs more than it makes.
Binet and Field's IPA research backs this up: brands that optimise purely for short-term efficiency tend to underinvest in growth. Their 60:40 rule - balancing brand building with performance activation - is partly about this. Brand spend looks "inefficient" on ROAS, but it is doing the work that performance cannot. The chart above shows why total profit peaks at a ROAS that looks worse than your current one.
How this works
ROAS and profitability: ROAS is calculated on gross revenue including VAT; that matches what Google Ads and Meta report. But profitability uses ex-VAT revenue because VAT is not yours to keep. The calculator strips VAT first, then subtracts cancellations, product costs, fulfilment, and your margin target. Break-even ROAS and target ROAS both account for VAT in their thresholds.
Channel comparison: Different channels reach customers at different stages of intent, so they naturally have different ROAS. The comparison applies the same cost structure everywhere so you are comparing like for like. A channel with lower ROAS can still be profitable and worth scaling - the numbers here make that obvious.
The ROAS trap model: The diminishing returns curve is a simplification. Real diminishing returns depend on audience saturation, creative fatigue, and competitive pressure. But the core principle holds: optimising for ROAS alone leads to underspending. The optimal point is where marginal profit hits zero.
Real advertising has attribution problems, cross-channel effects, and delayed conversions. Use this to build intuition about your unit economics, not as a precise forecast.
