Facebook Ad ROI Calculator

A "good" ROI can vary significantly by industry, product margin, and business goals. However, a common benchmark to aim for is an ROI of 100% or more (a 2:1 return), which means you're doubling your ad spend in net profit. Anything positive means you're profitable, which is the first goal.

ROAS (Return on Ad Spend) measures gross revenue generated for every dollar spent on advertising (Total Revenue / Ad Spend). ROI (Return on Investment) measures the net profit generated after accounting for all costs, including ad spend and the Cost of Goods Sold (COGS). ROI is the true measure of profitability.

A negative ROI means your total costs (ad spend + COGS) are higher than your revenue. This could be due to several factors: high ad spend, low conversion rates, an offer that isn't compelling, targeting the wrong audience, or low product margins.

To improve ROI, focus on:
1. Refining your audience targeting.
2. A/B testing ad creatives and copy.
3. Improving your landing page conversion rate.
4. Optimizing your sales funnel.
5. Increasing the average order value (AOV) or customer lifetime value (LTV).

COGS (Cost of Goods Sold) represents the direct costs of producing the goods sold by a company. This can include materials and direct labor. It's crucial for ROI because it allows you to calculate your actual profit per sale, not just your revenue. Without COGS, you can't know if your campaigns are truly profitable.

You should let a campaign run long enough to exit Facebook's "learning phase" and gather statistically significant data. This is typically 7-14 days or after at least 50 conversion events. Calculating too early can give you misleading results based on insufficient data.

Yes. For "Average Revenue Per Conversion," you can enter the average lifetime value (LTV) of a new lead or the average sale value you get from a lead. For "COGS," you can enter the cost of servicing that new lead. This allows you to measure the profitability of your lead generation efforts.

While ROI is the most important metric for profitability, you should also track diagnostic metrics like Click-Through Rate (CTR), Cost Per Click (CPC), Conversion Rate, and Cost Per Acquisition (CPA). These metrics help you understand *why* your ROI is what it is and identify areas for improvement.

Yes, absolutely. This calculator can be used at any level: campaign, ad set, or individual ad. Simply pull the specific data (spend, clicks, conversions) for that single ad from your Facebook Ads Manager and enter it into the calculator to determine its specific profitability.