Ad Spend ROI Calculator

ROI stands for Return on Investment. When it comes to advertising, it tells you how much money you made compared to how much you spent. A positive ROI means your ads are profitable. A negative ROI means you're losing money on the campaign.

The formula is pretty simple: ROI = ((Revenue - Ad Spend) / Ad Spend) x 100. So if you spent $1,000 and made $3,000 in revenue, your ROI would be 200%. That means you made $2 for every $1 you spent.

ROAS stands for Return on Ad Spend. It's similar to ROI but calculated a bit differently. ROAS = Revenue / Ad Spend. So if you spent $1,000 and made $4,000, your ROAS is 4x or 400%.

The main difference is that ROI accounts for profit (revenue minus costs), while ROAS just looks at revenue relative to spend. ROAS is useful for quick campaign comparisons, but ROI gives you a better picture of actual profitability since it factors in what you spent.

This really depends on your industry and margins, but generally speaking, most businesses aim for at least a 100% ROI on paid social. That means you're doubling your money. For ROAS, a 4x return is considered solid for most industries.

E-commerce brands often target higher numbers since their margins can be tighter. B2B companies might accept lower initial returns if the customer lifetime value is high. The key is knowing your numbers and what works for your specific business model.

These are the core metrics you need to track for any paid campaign.

• CPC (Cost Per Click). How much you pay each time someone clicks your ad. Lower is better, but not if it means lower quality traffic.
• CTR (Click-Through Rate). The percentage of people who see your ad and actually click it. Higher CTR usually means your ad creative and targeting are working.
• CVR (Conversion Rate). The percentage of clicks that turn into conversions. This tells you how well your landing page and offer are performing.

These three metrics work together. You can have a great CTR but if your CVR is terrible, you're paying for clicks that don't convert. The goal is to optimize all three.

Every social platform has specific requirements for ad creative. If your headline is too long or your video is the wrong aspect ratio, your ad either won't run or it'll get cropped in a way that looks bad.

Knowing these limits upfront saves you time. You can create assets that work across multiple platforms or customize them for each one. The specs above cover the most common ad formats, but platforms do update these occasionally so it's worth double-checking before a big campaign launch.