Skip to content
CalcMetrio
Home / Marketing Calculators / Target ROAS Calculator
Marketing Calculators

Target ROAS Calculator

Calculate target ROAS from gross margin, other variable costs and desired profit margin.

Last reviewed: 2026-10-20

Calculations run locally in your browser. Your figures are not sent to a server or stored by us.

Target ROAS Calculator formula

Ad Budget Share = Gross Margin − Other Variable Cost % − Desired Profit %
Target ROAS = 1 ÷ Ad Budget Share (decimal)

Worked example

60% gross margin − 10% other variable cost − 10% desired profit leaves 40% of revenue for ads, implying a 2.5x target ROAS.

How to use this calculator

  1. Enter gross margin as a percentage of revenue.
  2. Enter variable costs that are not already included in gross margin.
  3. Enter the percentage of revenue you want to preserve as profit after advertising.
  4. Select Calculate to see the revenue share available for ad spend and the corresponding target ROAS.

Understanding the results

Target ROAS is derived from how much revenue can be spent on advertising after variable costs and desired profit are reserved. A smaller ad-spend share requires a higher ROAS.

Practical uses

Set channel targets from economics

Use margin rather than an arbitrary benchmark to establish a defensible starting ROAS target.

Model price or cost changes

See how target ROAS changes when product margin, fulfillment cost or desired profit changes.

Important notes

  • The model is a planning approximation and depends on accurate margin inputs.

Frequently asked questions

Why is target ROAS above break-even?

A target can reserve part of revenue for profit and other costs rather than spending all contribution on ads.

Can I use this for every channel?

Use channel-specific attribution and costs where possible.

Can I use one target ROAS for every product?

Not reliably when products have different margins, return rates, fees or customer value.

What happens if the available ad-spend share is zero or negative?

There is no positive advertising budget available under those assumptions, so a finite target ROAS cannot be calculated.

Learn the calculation

Use the guides below for the formula, worked examples and interpretation details.

Related calculators

Disclaimer

Results are estimates for general information only and are not financial, accounting, tax, investment or legal advice. Verify important figures with a qualified professional.