How to calculate ROAS

How to calculate ROAS? ROAS targeting can be very important for PPC campaigns in Google AdWords. It is the metric, that says you, if you are in profit or in lost.

The goal of this bidding strategy is to maximize revenue from Ads, but to preserve intended cost-benefit ratio. In product ads every conversion can have different conversion value, so determination of a uniform CPA is not possible. It is recommended to put into one campaign only products with the same margin, so there is the same cost-benefit ratio for all products in campaign.

ROAS Formula is: Revenue (total income from advertising) / Cost (total ads spend) = ROAS 

ROAS can be calculated also as percentage: ROAS x 100 = ROAS%


When you would like to know ROAS based on your gross margin, the gormula for minimum recommended ROAS is:      100 / margin = ROAS

If you have margin 20%, you can calculte ROAS this way: 100 / 20 = 5

In this case ROAS in % is 500%

As we see, in case of margin 20% is ROAS 5. So, every invested 1 € have to generate 5-fold turnover. If delivers more, it is a profit, if less –  loss.

The goal of target ROAS strategy requires conversion measurement in AdWords and achieving at least 15 conversions in the last 30 days. Better is to use this strategy when more data available – at least 100 conversions in last 30 days. The condition is to not to change campaign settings and campaign should have consistent performance over the last 30 days.


You can now use Target ROAS also in BlueWinston. In part Campaign settings you can set up Smart bidding with target ROAS. If you do not have enough conversions, you should wait some time, when campaign increase its perfomance. When it is not possible to use AI smart bidding ROAS in AdWordse, you can use in BlueWinston target CPA. This value is automatically calculated from price of every product.

Formula for minimum recommended ROAS is:      100 / margin = ROAS

Click here if you want to learn more about automated bidding types for Google AdWords campaigns.

By |Categories: How To Create| is an automated tool for creation of Product Search Text and Shopping Ads on Google. It is both an alternative and a must have addition to regular Google Shopping ads (Product Listing Ads, PLAs). Feed-driven product campaigns account for over 40% of the annual %CTR and displays in Google Search that lead to a successful transaction. Unique technology, innovative approach to keywords and ad creation for each product, group of products and their categories in the eshop, make this tool a number one in the global market. Today, BlueWinston is being used by hundreds of clients in over 50 countries (see testimonials from PPC specialists and merchants). Thanks to you do not only automate the creation of ads of your products, but you can also automate their optimization and management thanks to set of automated rules and bidding scripts applied in incredibly short time – every 6 hours!
  • boost sales up to +60%
  • increase ROAS up to +1500%
  • decrease CoS by -40%
  • create ads for all your products
  • automate creation & management