A campaign at a 40% margin
Ad spend: $1,000, revenue: $3,500, margin: 40%
ROAS: 3.5x · Break-even ROAS: 2.5x (1 ÷ 0.4) · Profitable, since 3.5x clears 2.5x.
ROAS & Break-Even Calculator
Calculate ROAS and the break-even ROAS from ad spend, revenue and contribution margin.
- ROAS
- 3.5x
- Break-even ROAS
- 2.5x
This ad spend clears its break-even ROAS.
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About this tool
A ROAS of 3x sounds healthy until it's compared against the margin the sale actually carries — an ad spend that's profitable at a 60% margin can lose money at a 20% one. Break-even ROAS is the number that actually matters: below it, more ad spend loses more money, not less.
How to use it
- Enter ad spend, the revenue it generated, and the contribution margin those sales carry before ad cost.
- See the actual ROAS and the break-even ROAS it needs to clear.
- Optionally enter the contribution per sale to see the break-even cost per acquisition.
Examples
Common problems
- The break-even ROAS seems too low or too high compared to what I've read elsewhere.
- Break-even ROAS is just 1 divided by the contribution margin as a fraction — a higher margin means a lower break-even ROAS is needed (more room before ads stop being profitable), and a thin margin needs a much higher ROAS just to break even. If the number looks off, double-check the margin percentage entered is pre-ad-spend, not final net margin.