ROAS Calculator
The ROAS calculator assists you in determining what your CPA (Cost Per Acquisition) and AOV (Average Order Value) need to be to keep your return on ad spend (ROAS) above the targeted level.
What Does (ROAS) Mean?
ROAS stands for Return On Ad Spend, and it is a key marketing metric that quantifies the revenue generated for each dollar allocated to digital advertising. In its essence, ROAS serves as an index of the efficacy of your advertising campaigns; the more effectively your ads resonate with your target audience, the greater the revenue yielded per advertising dollar spent. The higher the ROAS, the more successful the outcome is considered.
How To Calculate (ROAS)?
ROAS, which stands for Return On Ad Spend, is a crucial marketing metric that measures the conversion value generated from your advertising investments. Despite the significance and power of this metric potentially suggesting a complex calculation, the reality is surprisingly straightforward: the ROAS formula is quite simple. ROAS is calculated by dividing the total conversion value by the advertising expenses.
ROAS = Conversion value / Advertising cost.
For instance, let's assume you organized a 10-day Facebook campaign for your dropshipping store with an advertising budget of $1500. If the campaign resulted in a revenue of $7500, then the ROAS would be calculated as follows:
ROAS = $7500 / $1500 = 5
Our (ROAS) Calculator
Current Average CPA (Cost Per Acquisition) - The average cost you incur for acquiring a new customer.
Current AOV (Average Order Value) - The average amount of money spent per order placed by customers.
Target ROAS (Return On Ad Spend) - The desired return on advertising expenditure that you aim to achieve through your marketing campaigns.
Calculated ROAS - The actual average return on advertising spend that you are currently realizing with your marketing efforts.
