Short answer
ROAS (return on ad spend) is the revenue your ads bring in divided by what they cost. Google Ads shows it as a ratio in the Conv. value / cost column, while Target ROAS is entered as a percentage, so $5 in sales from $1 of ad spend is 5.00, or 500%. Your ads only make a profit when ROAS beats 1 divided by your profit margin.
How to use the Google Ads Budget, CPA and ROAS Calculator
- Pick a tab: Plan from a budget, Work back from a goal, or Break-even.
- Enter your cost per click and conversion rate, or choose an industry preset that fills in the 2026 medians for your industry.
- Add your close rate, average customer value and profit margin so the results reach customers and profit, not just leads.
- Read clicks, leads, cost per lead, cost per customer, revenue, ROAS and profit after ad spend, then change one input at a time.
How do you calculate ROAS for Google Ads?
ROAS (return on ad spend) is conversion value divided by ad cost. Google Ads reports it in the Conv. value / cost column, which divides your total conversion value by the total cost of all ad interactions (Conversion value per cost: Definition).
That column is a ratio, such as 5.00, while Target ROAS bidding uses the same number as a percentage. Google's own example is "$5 USD in sales ÷ $1 USD in ad spend x 100% = 500% target ROAS" (About Target ROAS bidding). The calculator shows both forms, so a 4.00 in your reports and a 400% target mean the same thing.
What does each result mean?
The Plan from a budget tab follows one chain, from budget to profit. The Google Ads steps use Google's definitions. Close rate, customer value and margin come from your own sales records, because they describe what happens after a lead reaches you.
| Result | How it is worked out | Google Ads equivalent |
|---|---|---|
| Clicks | Budget ÷ cost per click | Avg. CPC is the total cost of your clicks ÷ the number of clicks (definition) |
| Leads | Clicks × conversion rate | Conv. rate is conversions ÷ the ad interactions that can be tracked to a conversion (definition) |
| Cost per lead (CPA) | Budget ÷ leads | Cost / conv. is total cost ÷ conversions (definition) |
| Customers | Leads × close rate | None, from your sales records |
| Cost per customer | Budget ÷ customers | None, from your sales records |
| Revenue | Customers × customer value | Conv. value, if your conversions carry a value |
| ROAS | Revenue ÷ budget, as a ratio and a percentage | Conv. value / cost (ratio) and Target ROAS (percentage) |
| Profit after ad spend | Revenue × margin, minus budget | None, your own calculation |
A worked example
Here is the arithmetic with round numbers picked only to show how the steps connect. They are not benchmarks or a forecast.
- $2,000 budget ÷ $5 per click = 400 clicks.
- 400 clicks × 5% conversion rate = 20 leads, or $100 per lead.
- 20 leads × 25% close rate = 5 customers, or $400 per customer.
- 5 customers × $1,000 = $5,000 revenue, a ROAS of 2.50 (250%).
- $5,000 × 40% margin = $2,000 gross profit, minus $2,000 of ad spend = $0.
A 250% ROAS sounds healthy, yet at a 40% margin this plan only breaks even.
What is a good ROAS for Google Ads?
There is no single good ROAS, because revenue is not profit. The number to beat is your break-even ROAS: 1 ÷ your profit margin. Above it, the ads earn more than they cost; below it, they lose money, however good the ROAS looks.
Use your gross margin: the share of each sale left after the cost of delivering it, before advertising.
| Profit margin | Break-even ROAS | As a percentage |
|---|---|---|
| 25% | 4.00 | 400% |
| 40% | 2.50 | 250% |
| 50% | 2.00 | 200% |
| 80% | 1.25 | 125% |
The Break-even tab also gives your maximum cost per customer: customer value × margin. For a $1,000 job at a 40% margin, that is $400 of ad spend per customer won. If customers come back, use what they spend with you over time, not just the first invoice.
How much should you spend on Google Ads?
Start from the result you need. The Work back from a goal tab runs the chain in reverse: leads wanted ÷ conversion rate = clicks needed, then clicks × cost per click = budget. Twenty leads at a 5% conversion rate and a $5 click need 400 clicks, or $2,000.
No figures of your own yet? Choose an industry preset. The presets fill in the median cost per click and conversion rate for your industry from WordStream and LocaliQ's 2026 Google Ads benchmarks, which cover 13,474 US search campaigns.
A median is the middle campaign, so half of the campaigns sat above it and half below. Swap in your own numbers once you have a month or two of results, and read how much Google Ads costs in 2026 for what drives click prices.
Mistakes that throw off a ROAS plan
- Treating leads as sales. For a lead business, Google's Cost / conv. is a cost per lead. If you close 1 in 4 leads, each customer costs four times as much.
- Ignoring margin. A ROAS above 1.00 can still lose money once you pay for the work itself.
- Mixing up ratio and percentage. Target ROAS is entered as a percentage, so a goal of 4.00 goes in as 400%.
- Leaving conversion values empty. With no values recorded, Conv. value / cost stays at zero. Use the customer value field here, then compare the plan with real results in the PPC Report Generator.
- Scaling spend before cutting waste. Find searches that cost money and never convert with the Search Term Analyzer, and split the budget by campaign with the Campaign Structure Generator.
Sources
- Conversion value per cost: Definition (Google Ads Help)
- About Target ROAS bidding (Google Ads Help)
- Average cost-per-click (Avg. CPC): Definition (Google Ads Help)
- Conversion rate: Definition (Google Ads Help)
- Understand your conversion tracking data (Google Ads Help)
- Google Ads Benchmarks 2026 (WordStream and LocaliQ)
Updated 2 October 2026 by the Paid Pilot team. Google Ads is a trademark of Google LLC; Paid Pilot is an independent agency.