Free tool
Is Google Ads actually making you money?
Google shows you a ROAS. A ROAS is not a profit. This works out what is left once the goods are paid for, for one margin group at a time.
Most shop owners look at the ROAS in their Google Ads account, see a number above 4, and assume the campaign is fine. But a ROAS only compares revenue to ad spend. It says nothing about what the goods cost you. A 4.0 ROAS is excellent on a 40% margin and loses money on a 20% one.
This calculator does what the spreadsheet version did, with the margin as an input rather than baked into the formula.
Your numbers
Take these from one margin group in your shop
Your margin
Google Ads is earning money here
- Goods CHF 76'923
- Google Ads CHF 17'966
- Left over CHF 5'111
- Shortfall CHF 0
| From Google Ads | Everything else | Together | |
|---|---|---|---|
| Revenue | CHF 100'000 | CHF 150'000 | CHF 250'000 |
| Cost of goods | CHF 76'923 | CHF 115'385 | CHF 192'308 |
| Gross margin | CHF 23'077 | CHF 34'615 | CHF 57'692 |
| Google Ads spend | CHF 17'966 | CHF 0 | CHF 17'966 |
| Profit | CHF 5'111 | CHF 34'615 | CHF 39'726 |
Repeat this for every campaign you run, sorted by product margin. Products with different margins need different targets.
How to fill it in
- Pick one margin group. Not the whole shop. Take a set of products that share roughly the same margin, because a single average across very different margins tells you nothing.
- Choose a period in your Google Ads account, a full year works well, and read the revenue and the ROAS for that group.
- Enter the total revenue those same products made in the shop over the same period, Google Ads and everything else together.
- Set your margin and say whether that number is a margin on revenue or a markup on cost. They are not the same thing, see below.
- Repeat for every campaign, sorted by product margin.
The one number to take away
That single number is more useful than any target someone hands you, because it comes from your own economics. Once you know it, the question stops being "is 4.2 a good ROAS" and becomes "is 4.2 above my break-even, and by how much".
Margin or markup? They are not the same
This trips up almost everyone, and the original spreadsheet got it wrong too. It divided revenue by 1.3 and labelled the result "margin 30%".
| 30% margin on revenue | 30% markup on cost | |
|---|---|---|
| You buy at | 70 | 100 |
| You sell at | 100 | 130 |
| You keep | 30 | 30 |
| As a share of revenue | 30.0% | 23.1% |
| Break-even ROAS | 3.33 | 4.33 |
The same words, a full point of difference in the ROAS you need. If you take your margin figure from a supplier price list, it is almost certainly a markup. If it comes from your accounting, it is usually a margin. The switch in the calculator handles both.
What this deliberately leaves out
Not in this calculation
- Returns, which take revenue back out after Google has counted it
- Payment fees and shipping, if they are not already in your cost of goods
- Repeat orders from a customer Google paid for once
- Your fixed costs, which no campaign-level number can carry
That is on purpose: this tool answers one question cleanly rather than four questions vaguely. If you want the full per-order picture, including returns and repeat purchase, use the Target ROAS calculator in our ROAS guide, which works forwards from a single sale instead of backwards from a year.
Where people go wrong with this
The second most common: comparing the ads revenue against the shop's total revenue and concluding Google is "only" a fraction of the business. That fraction is the point. What matters is whether that fraction pays for itself, which is exactly what the profit column above tells you.