Ad Break-Even ROAS Calculator
Tells you the return on ad spend you must hit to cover costs and shows the profit your current ROAS produces.
Recent
Formula
How the calculation works
The calculator divides one by the gross margin as a decimal to get the break-even ROAS.
It then divides revenue by spend for the actual ROAS and subtracts spend from revenue for the profit.
A 40 percent margin gives a break-even ROAS of 2.5, and a ROAS of 3 on 100000 spend leaves 200000 in profit.
Common mistakes
- Using revenue instead of gross margin for the break-even formula sets a target that is far too low to be safe.
- Ignoring product costs and shipping in the margin gives a break-even ROAS that looks achievable but loses money.
When to use it
- Use it to set the lowest ROAS your ads must reach before they start losing money.
- Use it to spot the moment a campaign drops below break-even and pause spending in time.
Worked example
With a gross margin of 40 percent, the break-even ROAS is 2.5, and revenue of 300000 against a spend of 100000 gives a ROAS of 3 and a profit of 200000.
Common questions
Why is break-even ROAS higher for low margin products?
A low margin leaves less profit per sale, so you must generate more revenue for every unit of spend to cover the same costs.
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