ROAS Calculator
The ROAS calculator shows what your CPA (cost per acquisition) and AOV (average order value) need to be in order to remain over your target ROAS (return on ad spend). The blue areas are above your target ROAS and the red are below.
What is ROAS?
ROAS stands for Return On Ad Spend and is a marketing metric that measures the amount of revenue earned for each dollar spent on online advertising.
In the simplest terms, ROAS is an indicator of how effective your advertising efforts are; the better your advertising connects with your prospects, the more you will earn from each ad dollar. The higher your ROAS, the better.
How is ROAS calculated?
The fact that ROAS is one of the most important and powerful metrics, may make you think that it's difficult to calculate. Fortunately, the exact opposite is true: the ROAS formula is very simple. ROAS equals the total conversion value divided by advertising costs.
ROAS = Conversion value divided by the advertising cost.
Imagine that you run a Facebook campaign for 10 days with an advertising budget of $1000 to promote your dropshipping store. Your campaign ends up bringing you $5000 in revenue, giving you a ROAS of:
ROAS = $5000 / $1000 = 5
Our ROAS calculator?
- Current average CPA - is the average amount you pay per acquisition.
- Current AOV - is the average amount spent for each order placed by a customer.
- Target acquisition cost - is the return on ad spend you aim to attain from your marketing campaigns.
- Calculated ROAS - is the average return on ad spend you are currently achieving with your marketing efforts.
