Free tool
Break-Even & Target ROAS Calculator
A "good ROAS" means nothing without your margin. Enter 2 numbers: the tool calculates the minimum ROAS to avoid losing money and the target ROAS to aim for.
How these thresholds are calculated
Break-even ROAS = 1 ÷ Gross margin Target ROAS = Break-even × (1 + Profitability goal)
The break-even ROAS answers a simple question: how many euros of revenue do I need for every euro of advertising, given that only my margin comes back to me? With a 25% margin, you need €4 of sales to cover €1 of ads: break-even at 4.00. With a 50% margin, €2 is enough.
The target ROAS adds your profit goal on top of break-even: 30% margin (break-even 3.33) and a 20% goal → target 4.00. That value, expressed as a percentage (400%), is what you use as tROAS in Google Ads bidding strategies.
Frequently asked questions
What is the break-even ROAS?
It is the ROAS at which you neither make nor lose money after product costs. It depends only on your gross margin: 1 ÷ margin. With a 25% margin, a ROAS of 3.5 that "looks good" is actually a loss, because your break-even is 4.00.
What target ROAS should I set in Google Ads?
Start from your target ROAS calculated here, expressed as a percentage (a ROAS of 3.25 = 325%). If you have fewer than 30 conversions over 30 days, start lower (close to break-even) and increase gradually. And never set a tROAS more than 20% above your current ROAS: the algorithm would severely limit your delivery.
My ROAS looks good but I am not making money, why?
Because ROAS ignores your product costs. A 3.5 ROAS with a 25% margin loses money (break-even 4.00), while the same ROAS with a 40% margin is comfortably profitable (break-even 2.50). That is also why POAS (profit on ad spend) is a more honest indicator than ROAS.
ROAS or CPA, which one should drive my campaigns?
ROAS if your order values vary a lot (catalogue e-commerce): it optimises on value. CPA if your conversions have a homogeneous value (lead gen, services, single product). Both derive from your margin: use the ideal CPA calculator for the latter.
Is your current ROAS below your break-even?
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