Marketing ROI & Break-Even Calculator

How the numbers are calculated

• ROAS = revenue ÷ ad spend.
• MER = revenue ÷ (ad spend + fees and other marketing costs).
• Break-even ROAS = 1 ÷ gross margin. At a 40% margin you need a ROAS of 2.5 just to cover the cost of what you sold.
• Profit after marketing = revenue × gross margin − ad spend − fees.
• Marketing ROI = profit after marketing ÷ (ad spend + fees).

The key idea: a campaign is only profitable when its ROAS is above your break-even ROAS after fees. That is why we report profit, not just platform ROAS. Our guide to ROAS and performance marketing and the ROAS definition go deeper, and the marketing budget calculator helps you plan spend.

Frequently Asked Questions

What is the difference between ROAS and ROI?

ROAS (return on ad spend) divides revenue by ad spend. ROI measures profit: it subtracts the cost of the goods or services sold and all marketing costs, including agency or management fees, then divides by those marketing costs. A campaign can have a healthy-looking ROAS and still lose money once margins and fees are included.

What is break-even ROAS?

Break-even ROAS is the return on ad spend at which a campaign covers its costs: 1 divided by your gross margin. With a 40% gross margin, break-even ROAS is 2.5, meaning every 1 unit of ad spend must bring in 2.5 units of revenue before the campaign starts making a profit.

What is MER in marketing?

MER (marketing efficiency ratio) is total revenue divided by total marketing spend across all channels. It is a blended measure that avoids the attribution arguments between platforms and is useful for judging overall marketing efficiency.

Should agency fees be included in ROI?

Yes. Management fees, creative production and tools are real marketing costs. Leaving them out overstates ROI and can make an unprofitable campaign look profitable.