# ROAS Formula – How to Calculate Your Return on Ad Spend Manually

### ROAS Formula

• Example #1:  \$4000 in revenue generated from \$1000 in ad spend is \$4000 / \$1000 = 4 or 400% ROAS.
• Example #2.  \$40,000 in revenue generated from \$50,000 in ad spend is \$40,000 / \$50,000 = .8 or 80% ROAS.

### Projected ROAS Formula for eCommerce

Advertising budget divided by average cost per click times average conversion rate times average order value divided by advertising budget.

• ((((Advertising Budget / Average Cost Per Click) x Average Conversion Rate) x Average Order Value) / Advertising Budget)
• Example #1. (((\$10,000 / \$5) * .03)*\$250) / \$10,000 = 1.5 or 150% ROAS.
• Example #2 (((\$5,000 / \$2) * .05)*\$55) / \$5,000 = 1.375 or 137.5% ROAS.

### Projected ROAS Formula for Non-eCommerce

Advertising budget divided by average cost per click times average conversion rate times average conversion rate from lead to customer times average lifetime value of a customer divided by advertising budget.

• (((((Advertising Budget / Average Cost Per Click) x Average Conversion Rate) x Average Conversion Rate from Lead to Customer) x Average Lifetime Value of a Customer) / Advertising Budget)
• Example #1. ((((\$15,000 / \$20) * .09)*.12)*\$12,500) / \$15,000 = 6.75 or 675% ROAS.
• Example #2. ((((\$25,000 / \$25) * .08)*.20)*\$6000) / \$25,000 = 3.84 or 384% ROAS.

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