How the numbers connect
Facebook and Instagram ads are usually bought by impressions. Every step after that loses people: only some see and click, and only some of those buy. The calculator follows that funnel.
Clicks = impressions × CTR
Sales = clicks × conversion rate
Revenue = sales × order value
Profit = revenue × margin − budget
Example
$300 at a $12 CPM buys 25,000 impressions. At a 1.2% CTR that is 300 clicks ($1 each). A 2% conversion rate gives 6 sales, or $270 revenue at $45 each. With a 50% margin you keep $135, so the campaign loses $165: ROAS is 0.9x against a break-even of 2x.
Which number should I improve?
Change one input at a time and watch the profit. Often the conversion rate (better product page, clearer price, reviews) or order value (bundles) has more effect than cheaper clicks. Use the break-even ROAS calculator to know the ROAS you must reach.
Use your own numbers from Meta Ads Manager whenever you can. CPM, CTR and conversion rates vary a lot between industries, countries and seasons.
Frequently asked questions
What is CPM?
Cost per mille: what you pay for 1,000 ad impressions. It is shown in Meta Ads Manager for each campaign.
What is the difference between CTR and conversion rate?
CTR is the share of people who click the ad. Conversion rate is the share of those visitors who then buy.
How much should I spend to test an ad?
Spend enough to get a meaningful number of clicks. Set the budget so the calculator shows at least a few expected sales; with fewer than that, results are mostly luck.
Sources
Last reviewed: November 2026 · By Muhammad Shujah