What Is a Good ROAS? (And Why It's Your Number, Not a Benchmark)

A "good" ROAS is any return that clears your break-even — and break-even depends entirely on your margin. As rough guardrails, a 2:1 return is often the floor, and 3–4:1 is a common healthy target. But the honest answer is that the right number is specific to your business, and it's easy to calculate.

Start with break-even, not a benchmark

Your break-even ROAS is simply 1 ÷ gross margin. If your gross margin is 50%, you break even at a 2.0 ROAS — every dollar of ad spend has to return two dollars of revenue just to cover the product cost. At a 30% margin, break-even is ~3.3. At 70%, it's ~1.4. Anything above break-even is profit on the media (before overhead); anything below is a loss, no matter how "good" the number sounds.

A 4.0 ROAS is a loser at a 20% margin (break-even 5.0), and a 2.0 ROAS is a winner at a 60% margin (break-even 1.67). The benchmark means nothing without your margin.

Rough benchmarks by channel

With that caveat, typical patterns hold across accounts:

• Branded search & retargeting post the highest ROAS — but they're harvesting demand you already created, so they flatter the number.
• Non-branded search & shopping land in the middle.
• Prospecting (display, video, cold social) shows the lowest ROAS because it's building demand, not capturing it — judge it on assisted conversions and new-customer volume, not last-click ROAS alone.

ROAS vs. ROI vs. break-even

ROAS = revenue ÷ ad spend (media efficiency). ROI = (gain − cost) ÷ cost, which includes margin and costs beyond media, so it's the truer profit picture. Use ROAS for the day-to-day media decision and ROI to make sure the account is actually making money.

First-order ROAS vs. LTV

If customers buy again, a first-purchase ROAS below break-even can still be profitable once repeat revenue is counted. Decide up front whether you're optimizing to first-order ROAS (safe, conservative) or lifetime value (aggressive, requires you to trust your retention data). Mixing them is how accounts quietly lose money.

Set your target, then forecast to it

Calculate break-even from margin, add the profit you need on top, and that's your target ROAS — not a number you read in a blog post. Then forecast your budget against it before you spend, so you know whether the plan can realistically clear the bar. That's the difference between a target and a hope.

Frequently asked questions