Break-even ROAS is the revenue-to-ad-spend ratio where your profit reaches zero after accounting for non-advertising costs.
Break-Even ROAS Formula
Break-Even Ad Spend = Revenue – Non-Ad Costs
Break-Even ROAS = Revenue / Break-Even Ad Spend
What Counts as Non-Ad Costs?
- Cost of goods sold
- Shipping and fulfillment
- Payment and marketplace fees
- Other variable costs
Example
If attributed revenue is $5,000 and non-ad costs total $2,700, the business can spend up to $2,300 on ads before reaching zero profit. Break-even ROAS is therefore $5,000 divided by $2,300.
Target ROAS for Profit
A profitable target should usually be higher than break-even ROAS. Reserve part of revenue for the profit margin you want before calculating the maximum advertising spend.
Use the Break-Even ROAS Calculator
Our Break-Even ROAS Calculator estimates actual ROAS, profit after ads, break-even ROAS, maximum allowable ad spend, and target ROAS.