Free tool
Ads ROI calculator
Plan an ad budget before you spend it. Enter your budget, cost per click and conversion rates to see the clicks, leads, revenue and return on ad spend you can expect. Nothing you enter leaves your browser.
How the calculator works
It follows one visitor's path from ad click to sale, then scales it up to your budget:
- clicks = budget ÷ cost per click
- leads = clicks × conversion rate
- customers = leads × lead-to-customer rate
- revenue = customers × average sale value
- ROAS = revenue ÷ budget
What each number means
- Monthly ad budget: what you plan to spend on clicks in a month, on Google Ads, Microsoft Ads or social media.
- Average cost per click: the average price you pay when someone clicks your ad. Your ad account shows it. For a new campaign, Google's Keyword Planner gives estimates.
- Conversion rate: the share of clicks that become a lead: a form, a call or a booking.
- Lead-to-customer rate: the share of those leads that end up buying.
- Average sale value: what a new customer spends. If customers buy again and again, use what they're worth over time instead.
Three ways to get more from the same budget
- Raise your conversion rate with a landing page that matches the ad, loads fast and has one clear next step.
- Lower your cost per click by targeting searches with buying intent, adding negative keywords and improving your Quality Score.
- Close more leads by replying fast and following up. It's often the cheapest win of all.
Want it done for you? See our Google Ads management.
FAQ
Ad budget questions
How do you calculate the value of a lead?
Multiply your average sale value by your lead-to-customer rate. If a sale is worth 2,500 and one in five leads buys, each lead is worth 500. You can also divide your total sales by your total number of leads.
How do you calculate cost per lead (CPL)?
Divide your ad spend by the number of leads it brought in. For example, 3,000 spent for 55 leads is a cost per lead of about 54.55.
What is ROAS and how is it calculated?
Return on ad spend is the revenue your ads bring in divided by what they cost. 10,000 in revenue from 5,000 in ad spend is a ROAS of 2×, often written as 200%.
What's the difference between ROAS and ROI?
ROAS compares revenue with ad spend. ROI looks at what is left: revenue minus ad spend, divided by ad spend. The same campaign can have a ROAS of 2× and an ROI of 100%. Neither includes the cost of your product or service, so check your margins too.
What is a good ROAS?
It depends on your margins. To break even after the cost of what you sell, your ROAS needs to be at least 1 divided by your gross margin. With a 25% margin that is 4×, and with a 50% margin it is 2×.
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Google Ads management
Want this done for you?
MexSEO’s Google Ads management sets up conversion tracking first, then builds campaigns around the searches that bring customers.
Contact usRelated glossary terms
Get in touch
Want better numbers from your ads?
We set up conversion tracking first, then build Google Ads campaigns around the searches that bring customers. Tell us what you need and a specialist will reply by email.