# Ad Spend ROI Calculator | Advertising ROI & ROAS Turn advertising spend, the revenue it drives, and your gross margin into both ROAS and true marketing ROI. See return on ad spend and the COGS-aware, profit-based ROI behind it so you can defend ad budgets with the number finance actually asks for. ## ROAS vs ad ROI ROAS is revenue per dollar of ad spend (revenue ÷ ad spend). ROI is profit per dollar of ad spend, expressed as a percentage: **ROI = net profit ÷ ad spend × 100**, where net profit subtracts cost of goods (via your gross margin) and the ad spend itself from revenue — not just the ad spend. A campaign can show a healthy 4.0 ROAS and still be a poor ROI once product costs are subtracted. ## How to Calculate Ad Spend ROI Enter your gross profit margin alongside spend, conversion rate, and order value. The calculator derives revenue and ROAS, multiplies revenue by your margin to get gross profit, subtracts ad spend to get net profit, and divides that by ad spend for your Marketing ROI %. The displayed Net Profit accounts for cost of goods, so it matches the ROI rather than contradicting it. ## Frequently Asked Questions ### What is the difference between ROAS and ad ROI? ROAS is revenue per dollar of ad spend. ROI is profit per dollar of ad spend, as a percentage: net profit ÷ ad spend × 100, where net profit subtracts cost of goods (via gross margin) and the ad spend from revenue. A campaign can show a healthy 4.0 ROAS and still be a poor ROI once product costs are subtracted — which is exactly why finance asks for ROI, not ROAS. ### Why report ad ROI instead of just ROAS? ROAS is the right operational metric for media buyers optimizing day to day, but it is blind to margin: it treats $4 of low-margin revenue the same as $4 of high-margin revenue. ROI converts performance into the language of profit and the P&L, which is what budget owners and finance use to approve spend. ## Related Tools - [ROAS Calculator](/resources/tools/calculators/roas-calculator.md) - Calculate return on ad spend - [Target ROAS Calculator](/resources/tools/calculators/target-roas-calculator.md) - Find your break-even and profit-target ROAS - [Marketing Efficiency Ratio Calculator](/resources/tools/calculators/mer-calculator.md) - Evaluate blended marketing performance ## Get Started Ready to calculate your advertising ROI? Use our free calculator to turn spend and revenue into a CFO-ready number.