ROAS Explained: How to Know If Your Ads Actually Make Money
Muhammad Arif
Founder of ArifLab
What ROAS actually means
ROAS (Return On Ad Spend) answers one question: for every RM1 you spend on ads, how many RM come back in revenue?
RM5 in revenue for RM1 of ads = ROAS 5.0. It is the simplest health check for your ads.
How to calculate it
ROAS = revenue from ads ÷ ad spend. If a campaign spent RM2,000 and brought RM8,000, ROAS = 4.0.
The catch: revenue ≠ profit. A RM1,000 order might carry RM700 of costs — so a 'good' ROAS depends on your margin.
- ROAS 1.0 — you break even on the ads themselves
- ROAS 2.0-3.0 — healthy for low-margin businesses
- ROAS 4.0+ — strong for most Malaysian e-commerce
- Below your break-even ROAS — you are buying customers at a loss
Break-even ROAS: the number that matters
Break-even ROAS = 1 ÷ profit margin. If your margin is 25%, break-even ROAS is 4.0 — anything below that loses money even though it 'makes sales'.
Most business owners never calculate this, which is why they celebrate campaigns that are quietly losing money.
Use the free calculator
The ROAS Calculator works out your ROAS and break-even ROAS from ad spend, revenue and margin — so you know in one minute whether to scale the campaign or kill it.
Know your real ROAS
Free ROAS Calculator — ad spend, revenue, margin in; break-even ROAS out. No signup.
Use the ROAS Calculator →