Target ROAS Calculator
Find the minimum return on ad spend your campaigns need to achieve before they become profitable.
Enter your gross margin, variable costs, and desired profit margin. The calculator will estimate the target ROAS you should use when assessing Google Ads, Meta Ads, Shopping, Performance Max, and other paid campaigns.
What is target ROAS?
ROAS means return on ad spend. It measures how much revenue your advertising generates for every $1 spent.
For example, a ROAS of 4x means that every $1 spent on advertising generates $4 in revenue. However, revenue alone does not show profitability. Your gross margin, variable costs, and desired profit margin determine the ROAS your business actually needs.
Important disclaimer
This calculator estimates required ROAS based on revenue, margin, costs, and profit targets. It does not account for fixed overheads, refunds, taxes, agency fees, or delayed customer payments unless they are included in the inputs.
Frequent Asked Questions
What is a good target ROAS?
A good target ROAS depends on your gross margin and business costs. A 2x ROAS may be profitable for a high-margin business but unprofitable for a low-margin retailer.
Is target ROAS the same as break-even ROAS?
No. Break-even ROAS means advertising costs are fully covered but no profit remains. Target ROAS includes your desired profit margin, so it should usually be higher than break-even ROAS.
Why is a high ROAS not always profitable?
ROAS only compares ad spend with revenue. It does not automatically include product cost, delivery, transaction fees, refunds, salaries, agency costs, or other expenses.
Should I use gross margin or net profit margin?
Use gross margin as the starting point, then deduct variable costs and your desired profit margin. This gives a more useful advertising target than using net profit alone.
Can I use this calculator for e-commerce?
Yes. It is especially useful for e-commerce, Shopping Ads, Performance Max, and Meta Ads. Make sure you include product costs, shipping subsidies, payment fees, and other per-order variable costs.