In the first part of the calculator, you fill in all the costs, together with the correct VAT category of your product.
Then in the second part of the calculator you do the same, but with the revenue.
Next, the totals will be added up and the Break Even ROAS will automatically appear in the bottom column.
If you want to do a new calculation, click on the “Reset” button and you can enter new data.
Calculating the Break Even ROAS is very important.
Facebook, TikTok and Snapchat for example indicates for every campaign, ad set/ad group and ad what the ROAS is.
This means you can keep track of how effective that part of your online advertising campaign is at all different levels.
A ROAS of 1 means you are spending exactly the same amount of money as you are earning of a conversion.
If you spend €10 to sell a €10 product, Facebook/TikTok/Snapchat will indicate a ROAS of 1.
Simply put, this means you break even.
However, you must also take other costs into account.
For example, cost of goods, shipping costs, transaction costs, VAT, and maybe other costs.
This is where the Break Even ROAS comes in.
Calculating the Break Even ROAS is very important.
Facebook, TikTok and Snapchat for example indicates for every campaign, ad set/ad group and ad what the ROAS is.
This means you can keep track of how effective that part of your online advertising campaign is at all different levels.
A ROAS of 1 means you are spending exactly the same amount of money as you are earning of a conversion.
If you spend €10 to sell a €10 product, Facebook/TikTok/Snapchat will indicate a ROAS of 1.
Simply put, this means you break even.
However, you must also take other costs into account.
For example, cost of goods, shipping costs, transaction costs, VAT, and maybe other costs.
This is where the Break Even ROAS comes in.
With a Break Even ROAS you know exactly what ROAS you need for your ads to break even.
So if your Break Even ROAS is 1.8 for example.
You can check your Facebook/TikTok/Snapchat campaigns and see if they are profitable or if they are losing you money.
So in this example:
– Every campaign, ad set/ad group or ad that has a ROAS higher then 1.8 is profitable.
– Every campaign, ad set/ad group or ad that has a ROAS lower then 1.8 is losing you money.
– And of course on every campaign, ad set/ad group or ad that has a ROAS of 1.8 you are break even.
First of all, you have to add up all your costs together. Then by using the formula below you can calculate the ROAS at which a campaign, ad set/ad group or ad is profitable.
The Break Even ROAS formula:
Total revenue per product / (Total revenue per product – Total costs per product) = Break Even ROAS
Example:
Suppose you sell a product for €30, cost of goods are €8 & the shipping costs are €2.
30 / (30 – (8+2)) = 1.5
This means that for every campaign, ad set/ad group or ad that has a ROAS higher than 1.5, you make a profit.
Please note;
we have not included the VAT in this example
Don’t feel like doing the calculations yourself?
Or are you afraid you’ll make a mistake and want a more accurate calculation that includes VAT?
Then you can easily use our free Break Even ROAS Calculator.
First of all, you have to add up all your costs together.
Then by using the formula below you can calculate the ROAS at which a campaign, ad set/ad group or ad is profitable.
The Break Even ROAS formula:
Total revenue per product / (Total revenue per product – Total costs per product) = Break Even ROAS
Example:
Suppose you sell a product for €30, cost of goods are €8 & the shipping costs are €2.
30 / (30 – (8+2)) = 1.5
This means that for every campaign, ad set/ad group or ad that has a ROAS higher than 1.5, you make a profit.
Please note;
we have not included the VAT in this example
Don’t feel like doing the calculations yourself?
Or are you afraid you’ll make a mistake and want a more accurate calculation that includes VAT?
Then you can easily use our free Break Even ROAS Calculator.