Ad ROI CalculatorHow the reverse calculation works
Say you need 2,000 in profit from ads next month. You know your average order is 120, your gross margin is 50%, a click costs 1.20 and 3% of clicks buy.
- Profit from one sale before ads: 120 × 50% = 60.
- Ad cost of one sale: 1.20 ÷ 3% = 40.
- Profit per sale after ads: 60 − 40 = 20.
- Sales needed: 2,000 ÷ 20 = 100 sales.
- Clicks needed: 100 ÷ 3% ≈ 3,334 clicks.
- Ad budget: 100 × 40 = 4,000. That gives 12,000 in revenue and a ROAS of 3.
The calculator above does all of this the moment you type. Change any number, including a result, and the rest updates.
Why not just use a spreadsheet?
A media plan template works in one direction. You enter a budget and a CTR and get clicks and leads. To answer “what budget do I need for 50 customers?” you have to rebuild the formulas by hand. Here every metric is linked both ways, so any field can be the starting point.
Metrics and formulas
| Metric | Formula |
|---|---|
| CPM (cost per 1,000 impressions) | Ad spend ÷ impressions × 1,000 |
| CTR (click-through rate) | Clicks ÷ impressions |
| CPC (cost per click) | Ad spend ÷ clicks |
| CPL (cost per lead) | Ad spend ÷ leads |
| CPA (cost per customer) | Ad spend ÷ customers |
| ROAS (return on ad spend) | Revenue ÷ ad spend |
| Break-even ROAS | 1 ÷ gross margin |
| POAS (profit on ad spend) | Gross profit ÷ ad spend |
| ROI / ROMI | (Gross profit − ad spend) ÷ ad spend |
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FAQ
How do I calculate the ad budget I need for a profit goal?
Work out the gross profit one sale brings (average order value × gross margin) and what one sale costs in ads (cost per click ÷ conversion rate). The difference is the profit per sale. Divide your profit goal by it to get the number of sales, then multiply the sales by the ad cost per sale to get the budget.
What is the difference between ROAS and ROI?
ROAS is revenue divided by ad spend. It ignores what the goods cost you. ROI (also called ROMI here) is net profit divided by ad spend: revenue × gross margin − ad spend, divided by ad spend. A campaign can have a ROAS above 1 and still lose money.
Which currency does the calculator use?
Any. Enter all money values in the same currency and the results come out in that currency.
Is the calculator free? Is my data uploaded?
Yes, it is free and needs no signup. All calculations run in your browser. The numbers you type are not sent anywhere.
What does the Chrome extension add?
The free Ad ROI Calculator extension opens in the browser side panel and stays open while you switch tabs, so your numbers are not lost. It covers many more metrics and has ready funnels for e-commerce, lead generation, SaaS and offline sales. You can lock any value and let it calculate the rest. PRO adds side-by-side scenario comparison, unlimited saved plans and copying a whole plan.