In this tutorial, you will learn how to calculate ROAS (Return on Advertising Spend) in Google Sheets
How To Calculate ROAS (Return On Advertising Spend) in Google Sheets
When running a marketing or sales campaign, you may want to know how successful it was in terms of return on advertising spend (ROAS). This metric is useful when you need to know the amount of revenue you earn for each dollar spent on advertising.
The ROAS is calculated by dividing the total revenue earned from the campaign by the total cost of the campaign. A higher ROAS indicates your campaign was more successful.
Let’s take a look at a simple example.
Suppose you are selling a product that sells for $100. You were able to sell 5 of these products by advertising them on Facebook Ads. You now have a total revenue of $500. If you spent $100 on advertising, your campaign’s ROAS can be calculated with the formula ($500/$100) or 5x. This means that you earn $5 for every dollar spent on advertising.
In this guide, we will show you how to calculate the ROAS of your campaign in Google Sheets.
How To Compute the Return On Advertising Spend in Google Sheets
Here’s how to compute the return on advertising spend in Google Sheets.
Step 1
First, indicate the total revenue gained through the campaign.
For example, a sample marketing campaign may gain a business an additional $1,500 in sales.
Step 2
Next, we must consider the total amount spent on the campaign. This number typically refers to the amount spent on a single campaign.
In our example, we’ve spent a total of $500 on ads to promote our product.
Step 3
We can calculate the ROAS (Return on Ad Spend) by dividing the revenue by the total ad spend. Unlike the ROI (return-on-investment) metric, the ROAS focuses only on ad spending and ignores other costs such as the cost of goods sold.
In our example, we’ve determined that our campaign has a ROAS of 3x. This means that for every dollar spent on ads, we gain $3 in return through sales.
Step 4
We can also represent this number as a percentage by clicking the Format as a percentage shortcut in the toolbar.
Summary
This guide should be everything you need to calculate ROAS (Return On Advertising Spend) in Google Sheets.
You may make a copy of this example spreadsheet to test it out on your own.