How is ROAS calculated?
ROAS = revenue ÷ ad spend
If you spent 10,000 and generated 32,000 in revenue, ROAS = 3.2. But that number ignores product and shipping costs, so we also calculate:
Net profit = revenue − product and shipping costs − ad spend
ROI = net profit ÷ ad spend
Same example with 14,000 in product costs: profit = 32,000 − 14,000 − 10,000 = 8,000, ROI = 80%, and profit margin = 25% of revenue.
ROAS or ROI: which should you track?
ROAS is fast and available in Ads Manager every day, so it's ideal for comparing campaigns and ads. ROI tells you whether the business as a whole is profitable. The practical rule: track ROAS daily against your product's break-even ROAS, and calculate ROI weekly or monthly from real store numbers.
Why Ads Manager ROAS differs from reality
- Attribution window: Meta credits ads with sales that happen days after a click or view.
- Cancelled and returned orders: they count in the ad but never reach your bank.
- Pixel issues: duplicated or missing events move the number in either direction.
Details in Why Ads Manager Numbers Don't Match Your Store: Facebook Attribution Windows Explained.
What is a good ROAS?
There's no single number. A good ROAS is anything above your product's break-even ROAS with enough room to cover fixed costs. A store with a 60% margin can profit at ROAS 2, while one with a 25% margin can lose money at ROAS 3.5.