Marketing ROI calculator
CPC, CPM, cost per lead, ROAS, ACOS, and target CPA are all different views of the same campaign numbers — calculated together here so you can sanity-check one against another instead of juggling six separate tools.
CPM
$16
CPC
$1
Conversion rate
2.50%
Cost / conversion (CPA·CPL)
$50
ROAS
2.80x
ACOS / ad-to-sales ratio
35.7%
Total revenue from these conversions: $11,200. To hit a 20% margin on that revenue, cost per conversion needs to stay at or below $112 — currently within target.
See how your ROAS compares — anonymous, no account needed.
The formulas
A worked example
A campaign spends $4,000 and gets 250,000 impressions, 3,200 clicks, and 80 conversions worth $140 each ($11,200 total revenue). CPM = $4,000 ÷ 250,000 × 1,000 = $16. CPC = $4,000 ÷ 3,200 = $1.25. Cost per conversion = $4,000 ÷ 80 = $50. ROAS = $11,200 ÷ $4,000 = 2.8x, which is the same campaign as a 35.7% ACOS ($4,000 ÷ $11,200 × 100).
At a 20% target profit margin on that $140 average conversion value, target CPA is $140 × 0.80 = $112 — the actual $50 cost per conversion is comfortably under that, meaning there's room to bid more aggressively before this campaign stops being worth the target margin.
ACOS and ROAS: the same number, two names
ACOS (used inside ad platforms) and advertising-to-sales ratio (the general business-reporting term) are the identical calculation — ad spend divided by the revenue it generated. ROAS is just that same relationship inverted. Reported as a multiple instead of a percentage. A 25% ACOS and a 4x ROAS describe exactly the same campaign performance; neither is more "correct," they're just the convention each platform or report happens to use.
Setting a target CPA
Target CPA = revenue per conversion × (1 − target margin). Setting an arbitrary CPA goal without this math risks a target that either leaves money on the table or quietly erodes margin.
A blended target CPA across a catalog with different margins systematically overspends on low-margin items and underspends on high-margin ones — the same issue that applies to blended target ROAS.
Bidding right up to target CPA on every conversion leaves zero margin above target. Most teams build in a buffer, since actual results vary week to week around the average.
Why CPC alone can mislead
A campaign with a $0.60 CPC and a 1% conversion rate has a $60 cost per conversion. A campaign with a $1.25 CPC and a 4% conversion rate has a $31.25 cost per conversion — half the cost, despite a much higher CPC. Comparing campaigns on CPC alone, without conversion rate, can point budget toward the wrong one entirely.
Frequently asked questions
CPC (cost per click) is ad spend divided by clicks — what you pay each time someone clicks. CPM (cost per thousand impressions) is ad spend divided by impressions, times 1,000 — what you pay for reach, regardless of clicks. A campaign can have a low CPM but a high CPC if very few of those impressions turn into clicks.
CPL is ad spend divided by the number of leads generated — the same formula as cost per conversion, just applied at the lead stage of the funnel rather than the sale stage. If a campaign optimizes for leads rather than direct sales, use CPL as the primary efficiency metric, then track lead-to-customer conversion rate separately to get to a true customer acquisition cost.
Yes — they're the identical calculation (ad spend ÷ revenue, as a percentage), just used in two different contexts. ACOS is the term used inside ad platforms like Amazon Ads; advertising-to-sales ratio is the more general business/financial-reporting term for the same number.
They're reciprocals: ROAS = 100 ÷ ACOS%, and ACOS% = 100 ÷ ROAS. A 25% ACOS is a 4x ROAS (100 ÷ 25 = 4). A 5x ROAS is a 20% ACOS (100 ÷ 5 = 20). Whichever one a platform reports, the calculator above shows both at once so you don't need to convert by hand.
Break-even ROAS is the floor — the return that leaves zero profit after ad spend, based on gross margin alone. Target ROAS builds a desired profit margin on top of that floor, so it always sits higher. See the break-even ROAS calculator for the margin-based version of that specific calculation.
Target CPA is the most you can spend per conversion while still hitting a chosen profit margin: revenue per conversion × (1 − target margin). If a conversion is worth $140 and the target margin is 20%, target CPA is $140 × 0.80 = $112 — spending more than that per conversion eats into the target margin.
No. A cheap click that rarely converts can produce a worse cost per conversion than a more expensive click with a strong conversion rate. CPC only measures the cost of traffic — cost per conversion and ROAS are what actually determine whether a campaign is profitable.
ROAS compares revenue to ad spend only. A fuller marketing ROI figure would also subtract the cost of goods sold and any non-ad costs of fulfilling that revenue (fulfillment, payment fees, support) — closer to the logic in the break-even ROAS calculator, which builds from gross margin rather than raw revenue. ROAS is faster to check campaign-by-campaign; a margin-based ROI is the more accurate profitability number.
Calculate your own numbers above, free, or model the margin-based version on the break-even ROAS calculator and the CAC payback calculator.
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