How to Use This Calculator
Calculate your required ad budget to hit revenue targets in under 60 seconds.
Enter Your Target Revenue
Input the revenue you want to generate from your ad campaign. This is your goal—monthly, quarterly, or for a specific campaign.
Enter Your Target ROAS
Input the ROAS you expect to achieve. Use your historical average or industry benchmarks. Don't know yours? Use our B-ROAS Calculator first.
Add Profit Margin (Recommended)
Click "Show Profit Analysis" and enter your margin. This shows whether your budget plan is actually profitable after ad spend.
Read Your Required Budget
Required Ad Spend = your campaign budget. Net Profit shows what you'll keep after paying for ads. If negative, improve your ROAS target or margins.
Pro Tip: Use conservative ROAS estimates. Your average performance, not your best day, should drive budget planning.
Plan Your Ad Budget Before You Spend a Dollar
Most advertisers start campaigns by picking a budget and hoping for the best. Smart advertisers do it backwards: they start with revenue goals and calculate the exact budget needed to hit them. This is the power of reverse ROAS calculation.
Instead of asking "How much revenue will I get from this budget?", the Reverse ROAS Calculator asks:"How much do I need to spend to hit my revenue target?" This shift in thinking transforms ad budgeting from guesswork into a strategic, goal-oriented process.
Whether you're planning a product launch, scaling a winning campaign, or setting quarterly marketing budgets, this calculator helps you work backwards from your goals. Combined with your break-even ROAS, you can plan campaigns that are guaranteed to be profitable—before spending anything.
What Is Reverse ROAS Calculation?
Reverse ROAS calculation is the process of determining your required ad spend based on a target revenue and expected ROAS. It's the inverse of traditional ROAS analysis—instead of measuring performance after the fact, you're planning it before you start.
The Core Concept
Traditional ROAS: You spend $10,000 → You measure revenue → You calculate ROAS
Reverse ROAS: You set $100,000 revenue target → You assume 3x ROAS → You calculate $33,333 required spend
Why This Matters
Reverse ROAS planning helps you:
- Set realistic budgets based on actual revenue goals
- Align marketing with business objectives (revenue, profit targets)
- Plan cash flow by knowing upfront ad costs
- Communicate with stakeholders using concrete numbers
This approach is especially powerful when combined with the Break-Even ROAS Calculator. First, calculate your minimum ROAS needed to be profitable. Then use this calculator to determine the budget required to hit your goals at that ROAS. For Amazon sellers, our Amazon PPC Budget Calculator provides ACOS-based budget planning specific to Amazon advertising.
How to Calculate Reverse ROAS: Complete Formula Breakdown
The math behind reverse ROAS is straightforward. Let's break down each formula and when to use it.
Required Ad Spend Formula
The fundamental reverse ROAS calculation—how much you need to spend to hit your revenue target.
Required Ad Spend = Target Revenue / Target ROASAdding Profit Analysis
When you know your profit margin, you can calculate expected profit after ad spend:
Profit After Ads Formula
Calculate expected profit by subtracting ad spend from gross profit.
Gross Profit = Target Revenue × Profit Margin %
Net Profit = Gross Profit - Required Ad SpendValidating with Break-Even ROAS
Always check if your target ROAS exceeds your break-even point:
Break-Even ROAS Check
Ensure your target ROAS is above break-even before planning spend.
Break-Even ROAS = 100 / Profit Margin %
If Target ROAS > Break-Even ROAS → Profitable
If Target ROAS < Break-Even ROAS → Losing MoneyCritical Warning
If your target ROAS is below your break-even ROAS, you'll lose money on every sale. Either increase your target ROAS (aim for better ad performance) or improve your margins before running ads.
Real-World Examples: Reverse ROAS in Action
Let's walk through practical scenarios where reverse ROAS calculation helps with budget planning.
Example 1: Q4 Campaign Planning
An ecommerce brand wants to generate $500,000 in Q4 revenue from Facebook Ads, expecting 3.5x ROAS based on historical performance.
Example 2: Product Launch Budget
A brand is launching a new product and wants to generate $50,000 in launch month revenue. They expect 2.5x ROAS on a cold audience.
Example 3: Profitable Growth Check
A dropshipper with 20% margins wants to grow to $200,000/month in revenue. Are they profitable at 4x ROAS?
Key Takeaway
Example 3 shows why you must know your break-even ROAS before planning budgets. The dropshipper would lose $10,000/month at their target ROAS. They need to either improve margins or aim for higher ROAS.
When to Use the Reverse ROAS Calculator
This calculator is valuable for any scenario where you need to work backwards from revenue goals to determine ad budgets.
Quarterly Planning
Set revenue goals for the quarter and calculate the marketing budget needed to achieve them. Essential for annual budgeting and investor reporting.
Product Launches
Determine how much to invest in launch campaigns based on first-month revenue targets. Use conservative ROAS estimates for new products.
Scaling Decisions
Planning to scale from $50K to $200K/month? Calculate exactly how much additional spend is required based on your current ROAS.
Cash Flow Planning
Know upfront how much cash you need for ad spend. Critical for businesses with limited capital or seasonal cash flow.
Profit Planning: Beyond Just Revenue
Revenue targets are nice, but profit is what matters. Use the advanced profit analysis feature to ensure your budget plans actually make money.
The Profit Check
When you add your profit margin, the calculator shows:
- Break-Even ROAS: Minimum ROAS needed to not lose money
- Gross Profit: Revenue × Margin (before ad spend)
- Net Profit: What's left after paying for ads
Pro tip: If your net profit is negative, you have two options:
- Aim for higher ROAS — Improve creative, targeting, or landing pages
- Improve margins — Raise prices, reduce costs, or focus on higher-margin products
Common Reverse ROAS Mistakes to Avoid
Even with the right formula, budget planning can go wrong. Watch out for these common errors.
Mistake 1: Using Optimistic ROAS Estimates
Using your best-ever ROAS instead of a realistic average leads to under-budgeting. Use conservative estimates—your 50th percentile ROAS, not your best day.
Mistake 2: Ignoring ROAS Decay at Scale
ROAS typically decreases as you spend more. A campaign doing 5x at $10K/month might only do 3x at $50K/month. Factor in 10-30% ROAS decay when scaling.
Mistake 3: Planning Without Break-Even Check
Always verify your target ROAS is above your break-even before committing budget. Use the B-ROAS Calculator first.
Mistake 4: Not Accounting for Seasonality
ROAS varies significantly by season. Q4 typically sees better ROAS due to buyer intent, while Q1 is often weaker. Adjust expectations by month.
Budget Optimization: Getting More from Your Spend
Once you've calculated your required budget, here's how to maximize its effectiveness.
The 70/20/10 Budget Rule
- 70% on proven performers: Campaigns with consistent ROAS above target
- 20% on scaling tests: Expanding winning campaigns to new audiences
- 10% on experiments: New creatives, audiences, or platforms
Start Conservative
Begin with 50% of planned budget and scale up if ROAS meets targets. Better to leave money on the table than burn through budget below break-even.
Track Blended MER
Monitor Marketing Efficiency Ratio (Total Revenue / Total Ad Spend) alongside channel-specific ROAS for a complete picture.
Frequently Asked Questions
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Use our calculator above to determine exactly how much you need to spend to hit your revenue targets.
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