What is ROAS?

ROAS (Return on Ad Spend) measures how much revenue you earn for every unit of currency spent on ads. Important: this is revenue, not profit.

Formula

ROAS = Ad Revenue / Ad Spend

Example

If you spent $1,000 on Google Ads and generated $5,000 in revenue, your ROAS = $5,000 / $1,000 = 5.0x. But if COGS is $2,500, shipping $500, and payment fees $150, your actual profit is only $850.

Breakeven ROAS Calculator

Calculate the minimum gross revenue each $1 of ad spend must generate to break even.

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Net AOV: $120.00
All costs are net (excl. tax)
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CM1 (Product Margin)

55.0%

CM2 (Order Margin)

45.4%

Breakeven ROAS

2.20x

For every $1 of ad spend, you need at least this much gross revenue to cover all variable costs.

Recommended Target ROAS2.75x (+25% buffer for volatility)
Quick reference

Breakeven ROAS at different CM2 margins

CM2 Margin (net)Breakeven ROAS
20%5.00x
25%4.00x
30%3.33x
35%2.86x
40%2.50x
45%2.22x
50%2.00x
60%1.67x
70%1.43x
Margyn

Margyn calculates contribution margin alongside ROAS, so you see real profit on every campaign.

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What is ROAS? | Margyn Glossary