On this page
Why it matters
A ROAS that looks high can still lose money. A ROAS of 3 is a loss on products with a 25% margin, because each euro of ads brings only 75 cents of profit.
Knowing the break-even figure turns a ROAS target from a habit into a decision about profit.
Where to find it in Google Ads
- Unless you send cost of goods through Merchant Center or import profit, Google Ads does not know your margin, so it cannot show break-even ROAS.
- Work out your margin after cost of goods, shipping and payment fees.
- Divide 1 by that margin: that is the break-even ROAS.
- Compare it with each campaign's Conv. value / cost and its Target ROAS.
An example
Break-even ROAS = 1 ÷ margin
With a 40% margin, break-even ROAS is 2.5, or 250%. Anything below loses money on each sale once the ads are paid.
A shop with a 40% margin sets its target ROAS at 400%, comfortably above 250%, so each sale leaves profit after the ads.
Common mistakes
- Using revenue margin before costs like shipping, which overstates it.
- Setting one target for products with very different margins.
- Forgetting that returns and cancellations lower the real ROAS.
Checks that look at it
The audit checks Oppy runs on this, each with its own page.
Related terms
- Return on ad spend (ROAS): Conversion value divided by cost, often shown as a percentage: €400 of sales from €100 of ads is a 400% ROAS.
- Target ROAS: A bid target for the average return on ad spend.
- Conversion value: What a conversion is worth, sent with it or set as a default.