Put in whatever your campaign report gives you and get every derived metric at once, including the profit figure most reports leave out.
Fill in whatever your report gives you and leave the rest blank. Everything that can be derived from what you enter will appear on the right.
$12,000 of spend produced 192 conversions and $45,000 of revenue.
| Lever | Conversions | Cost per conv. |
|---|
Paid media has a small number of raw figures and a large number of derived ones. Spend, impressions, clicks, conversions and revenue are measured. Everything else on this page is arithmetic performed on those five.
Understanding the relationships matters more than memorising the formulas, because it tells you which lever to pull when a number moves in the wrong direction.
The second relationship worth committing to memory is that ROAS equals value per conversion divided by cost per conversion. If your average order value is $234 and each order costs $62.50 to acquire, ROAS is 3.75. Nothing else is involved.
| Metric | Formula | What it is good for |
|---|---|---|
| CTR | Clicks ÷ impressions | Whether the ad matches the intent behind the query or the audience. A relevance signal, not a performance one. |
| CPC | Spend ÷ clicks | What the auction is charging you. Driven by competition, quality score and match type. |
| CPM | Spend ÷ impressions × 1,000 | Comparing the cost of reach across placements. The main currency of awareness and social buying. |
| Conversion rate | Conversions ÷ clicks | Whether the landing page and offer convert the traffic you bought. The cheapest lever you own. |
| CPA | Spend ÷ conversions | The headline efficiency number for lead generation, and what most bid strategies optimise toward. |
| ROAS | Revenue ÷ spend | The headline number for ecommerce. Useless without knowing your break-even figure. |
| ACOS | Spend ÷ revenue | The same information inverted. Common on marketplaces, and easier to compare against a margin percentage. |
| POAS | Gross profit ÷ spend | What ROAS should have been all along. Accounts for the fact that revenue is not profit. |
Only three of these are worth optimising directly: cost per click, conversion rate and value per conversion. The rest are consequences.
Return on ad spend measures revenue, and revenue is not money you keep. Two businesses running at a ROAS of 4 can be in completely different positions: one with a 70 percent margin is thriving, the other with a 20 percent margin is losing money on every order.
Profit on ad spend fixes this by multiplying revenue by gross margin before dividing by spend. The threshold becomes intuitive: above 1.00x the campaign made money, below 1.00x it did not. No reference table, no benchmark article, no arguing about what good looks like.
If you are managing to ROAS rather than profit, you need to know the ROAS at which you break even. Our break-even ROAS calculator works it out from your order value, cost of goods and fees, and handles GST properly while it does.
Account-level metrics are weighted by volume, and the highest-volume campaign is usually branded search. A blended cost per click of $2.50 can easily be $0.80 branded and $9 generic. Never plan a prospecting campaign using a blended figure.
If a conversion action is set to count every conversion rather than one, a single customer filling in three forms records three conversions. Conversion counts that exceed click counts are the obvious symptom; conversion rates above 25 percent on generic search are the subtle one.
Many Australian ecommerce platforms pass the GST-inclusive order total to Google Ads and Meta as the conversion value, while the cost figure is ex GST. That combination overstates ROAS by about 10 percent before anything else goes wrong.
Google Ads and Meta use different attribution windows and different default conversion models. Add up the revenue each claims and the total will usually exceed what your store actually took. Neither number is lying, they are answering a question you did not ask.
A campaign spends $12,000, serves 480,000 impressions, receives 4,800 clicks, records 192 conversions and reports $45,000 of revenue on a 45 percent gross margin.
A ROAS of 3.75 sounds ordinary. A POAS of 1.69 says the campaign returned $1.69 of gross profit for every dollar spent and contributed $8,250 before overheads. That is the sentence worth taking to a board meeting. Figures are illustrative and returns vary by industry.
Divide revenue generated by ad spend. A campaign spending $12,000 and producing $45,000 of revenue has a ROAS of 3.75, usually written 3.75x. The figure means nothing on its own until you compare it to the ROAS at which your business breaks even, which depends entirely on your margin.
They are the same calculation inverted. ROAS is revenue divided by spend, ACOS is spend divided by revenue. A ROAS of 4 is an ACOS of 25 percent. ACOS is easier to compare against a margin percentage, which is why marketplaces tend to use it, while ROAS is the default language in Google Ads and Meta.
Profit on ad spend is gross profit divided by ad spend, rather than revenue divided by ad spend. It matters because revenue is not money you keep. A ROAS of 4 is excellent at an 80 percent margin and loss-making at a 20 percent margin, whereas a POAS above 1.00x means the campaign made money regardless of the industry.
Divide ad spend by conversions. The more useful form is cost per click divided by conversion rate, because it shows the two levers involved. A $2.50 cost per click at a 4 percent conversion rate gives a $62.50 cost per conversion, and improving either input moves it.
Almost always because the conversion action is set to count every conversion rather than one, so a customer who submits several forms or makes several purchases from one click records multiple conversions. View-through conversions being included in the total will also do it. Either way the conversion rate and cost per conversion built on that figure are not reliable.
It depends heavily on campaign type and whether the traffic is branded. Branded search regularly exceeds 15 percent while display can sit well under 0.5 percent, and neither number tells you whether the campaign made money. Treat click-through rate as a relevance signal for ad copy and targeting, not as a performance measure.
It can distort ROAS badly. Australian Google Ads accounts generally report cost excluding GST, while many ecommerce platforms send the GST-inclusive order total as the conversion value. Comparing the two overstates ROAS by roughly 10 percent. The checkbox in this calculator strips GST from the revenue figure so the two sides match. Confirm your GST position with your accountant.
Conversion rate, in most accounts. It is usually the cheapest to move, it improves cost per conversion and ROAS simultaneously, and unlike cost per click it is not capped by what competitors are willing to bid. Cost per click is worth attacking second, through quality score, match types and negative keywords.
This calculator is an educational estimating tool. It is not advice. The results are illustrative only and must not be relied upon as financial, accounting, taxation, investment, legal or professional advice of any kind. Nothing on this page takes into account your objectives, financial situation or particular needs.
The output is only as good as the inputs. Every figure returned is calculated solely from the numbers you enter. If those numbers are estimated, out of date, incomplete or incorrect, the result will be too. Paid Media Plus does not verify, and cannot verify, any figure you enter.
The model is deliberately simplified. Among other things, it does not account for:
Results are not a forecast, projection, guarantee or prediction of performance. No outcome is promised or implied. Advertising results vary by industry, offer, market conditions, competition and execution, and figures shown anywhere on this site are illustrative of well-optimised accounts rather than typical or expected results.
Verify independently. Before making any business, budgeting, bidding or investment decision, reconcile these figures against your own accounting records and obtain advice from a qualified accountant, tax agent or licensed financial adviser who understands your circumstances. If a figure produced here disagrees with your accounts, your accounts are right.
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Knowing your numbers is step one. These work out what the numbers should be.
The return on ad spend an order has to produce before it makes you a cent.
How much budget it actually takes to hit a lead or sales target, or what a fixed budget will realistically return.
Why platform numbers never sum, and a three-layer framework that reconciles to what the business banked.
Get a free, no-obligation audit of your account. You will get the findings and the three highest-impact fixes, whether or not we end up working together.
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