Wondering if your ROAS is “good enough”? The answer isn’t one-size-fits-all—but with a bit of math and strategy, you can define what success looks like for your business. In this post, we’ll break down how to calculate ROAS, what benchmarks to aim for, and how to make sense of your numbers.
💡 What Is ROAS?
Return on Ad Spend (ROAS) tells you how much revenue you make per dollar spent on ads.
Formula:
ROAS = Revenue / Ad Spend
For example, if you spend $100 and earn $400, your ROAS is 4.
But keep in mind: ROAS doesn’t account for product costs, shipping, or other expenses. It’s a good indicator—but not the whole picture.
🎯 What’s Considered a Good ROAS?
There’s no universal “good” ROAS. It depends on your margins, business model, and campaign goals. That said, here are some ballpark figures:
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2:1 – may be breakeven for low-margin products
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3:1 – often seen as healthy for most e-commerce businesses
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5:1+ – very strong, especially if you’re scaling
💬 Example: If your gross profit margin is 50%, you’ll need at least a 2:1 ROAS just to break even.
📊 How to Set Realistic ROAS Benchmarks
To define your ideal ROAS, consider the following:
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Start with Your Profit Margin
If your margin is 40%, your breakeven ROAS is 1 ÷ 0.4 = 2.5 -
Include Overheads
Add in shipping, software, team costs, etc. These push your breakeven higher. -
Segment by Funnel Stage
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Top of funnel (cold): 1.5–2 may be acceptable
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Bottom of funnel (warm/retargeting): aim for 3–5+
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Different Objectives, Different ROAS
Awareness campaigns might not convert immediately, so a low ROAS there isn't necessarily bad.
🧠 Context Is Key
A high ROAS doesn’t always mean higher profit.
💬 Example: You spend $10 and make $80 (ROAS = 8). Great! But if you scale and spend $200 to make $800 (ROAS = 4), you’re still better off in total revenue.
Also, don’t just look at ROAS in isolation—CTR, CPM, conversion rate, and AOV all matter.
🚀 Tools Like AdsPolar Can Help
Tracking and optimizing ROAS manually can be a mess. That’s where AdsPolar steps in:
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Cross-platform ROAS tracking (Facebook, TikTok, Google)
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Automated reports for clear trend insights
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Creative-level data to see what actually drives results
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Smart suggestions to adjust bids, budget, and audience targeting
📈 AdsPolar helps you make data-backed decisions, not guesses.
Final Thoughts
ROAS isn’t a vanity metric—it’s a compass. But it only works when you set it against the right benchmarks for your business.
Define your breakeven point, layer in real-world costs, and use tools like AdsPolar to guide your way. You’ll go from guessing… to scaling with confidence.