What Is a Good ROAS?
A good ROAS is any ROAS above your break-even point, and your break-even ROAS is 1 divided by your margin. At a 50% margin you break even at 2.0x, so 2.5x makes money. At a 30% margin you break even at 3.33x, so the same 2.5x loses money.
That's why there's no single good number for everyone. The right answer depends on three things:
- Your margin. This sets the floor.
- Whether customers come back. Repeat buyers can justify a lower ROAS on the first order.
- What the ROAS number can't see. Store sales, Amazon sales and anything else Meta doesn't track.
We see ROAS for a lot of large Meta accounts, and we still left ROAS out of our benchmarks on purpose. Accounts optimize for different goals, retail sales are invisible to Meta, and attribution settings vary. An average of those numbers wouldn't describe anyone.
So here's how to work out your own.
How to Calculate ROAS
ROAS stands for return on ad spend:
ROAS = revenue from ads ÷ ad spend
Spend $10,000 and get $30,000 in attributed revenue, and your ROAS is 3.0x. The same result can be written as 300% or 3:1.
You can also get there from your order value. ROAS equals average order value ÷ cost per purchase, so a $90 order at a $30 cost per purchase is also 3.0x.
ROAS counts revenue, not profit. That's the whole reason a 3.0x can lose money.
How to Find Your Break-Even ROAS
Break-even ROAS = 1 ÷ margin
At break-even, the profit from your sales exactly covers your ad spend.
| Margin | Break-even ROAS | Most you can pay in ads on a $100 order |
|---|---|---|
| 30% | 3.33x | $30 |
| 40% | 2.50x | $40 |
| 50% | 2.00x | $50 |
| 60% | 1.67x | $60 |
| 70% | 1.43x | $70 |
| 80% | 1.25x | $80 |
Our ROAS calculator does this for you once you enter your margin.
Use the Right Margin
Gross margin is a fine start, but it can flatter you. The closer you get to everything a single order really costs, the safer the number is.
Say you sell a $100 product:
- Product cost is $40, so gross margin is 60% and break-even looks like 1.67x.
- Shipping and fees add another $10, so the margin after those costs is 50% and break-even is really 2.00x.
Run that brand at 1.8x and it looks fine on gross margin. In reality each $100 order costs about $56 in ads and leaves $50 to pay for them, so it loses about $6 per order.
How to Set a Target ROAS
Break-even is the floor. Your target is the floor plus the profit you want from each sale.
Target ROAS = 1 ÷ (margin − profit you want)
If your margin is 50% and you want 15% of revenue left after ads, your target is 1 ÷ 0.35, or about 2.86x. On a $100 order, that's $35 in ads, $50 left after product and shipping, and $15 in profit.
Use this as a starting point, then adjust for the situations below.
When a Lower ROAS Is Fine
Margin only answers the question for a single order. These cases change the math.
| Situation | What to judge it on | Why |
|---|---|---|
| Customers reorder or subscribe | Profit per customer over a set window | The first order isn't the whole sale |
| You also sell in stores or on Amazon | Total revenue against total ad spend | Meta can't see those sales |
| You sell an app or a free trial | Cost per trial or install, then payback | Purchase ROAS looks tiny by design |
| You're chasing new customers | ROAS on new customers | Repeat buyers would often have bought anyway |
Repeat Purchases
Say your first order is $60, your margin is 60%, and customers spend $150 with you in their first year. That's $90 in profit per customer, so you could pay up to $90 to get one and still break even over the year.
A $90 cost per purchase on a $60 order is a 0.67x ROAS. It looks awful in Ads Manager, and it can still be a sound decision.
That's a real pattern. In our cost data, subscription brands paid more than their first order was worth, while brands with high-priced products paid as little as 16% to 23% of order value. The median brand paid about 46%. That's a wide spread for brands all buying on the same platform.
Two cautions. Use repeat rates you've actually measured, not the ones you're hoping for. And remember you pay for the ad today, while the repeat revenue arrives over the next year.
Retail and Amazon
A consumer goods brand's ROAS in Meta can look weak while its ads drive a big share of store sales. If that's you, a Meta ROAS target will talk you out of ads that work.
Watch total revenue against total ad spend instead, sometimes called MER (marketing efficiency ratio). If you pause a chunk of Meta spend and total sales drop a few weeks later, the ads were doing more than Ads Manager said.
Why Meta's ROAS Isn't the Whole Story
The ROAS in Ads Manager is one way of counting, and it has a few blind spots.
It depends on your attribution setting. Meta counts purchases within a set window after someone clicks, views or engages with your ad. Change the window and the number moves, though your sales haven't. Meta attribution explains how the settings work.
It flatters your closers. A sale static is often the last thing someone clicks before buying, so it shows a high ROAS. The videos that got that person interested in the first place look expensive. Cut them on ROAS alone and the closers usually get worse a few weeks later.
It swings with the calendar. Across the consumer brands in our Black Friday data, ROAS was 82% higher on Black Friday 2025 than in October, and 27% lower in the second week of December. Neither one is a new normal, so compare a week against the same stretch last year, not against last month.
It rewards spending less. A high ROAS can just mean you're only reaching people who were already close to buying. Here are two made-up months for a brand on a 50% margin:
| Lower spend | Higher spend | |
|---|---|---|
| Ad spend | $10,000 | $30,000 |
| ROAS | 4.0x | 3.0x |
| Revenue | $40,000 | $90,000 |
| Margin dollars | $20,000 | $45,000 |
| Profit after ads | $10,000 | $15,000 |
The month with the worse ROAS made 50% more profit. Stay above your target, but judge the account on the dollars left over.
How to Improve Your ROAS
Since ROAS is order value ÷ cost per purchase, there are two ways to raise it: sell more per order, or pay less per sale.
- Raise order value. Bundles, multi-packs and free-shipping thresholds can lift ROAS without touching your ads.
- Raise your conversion rate after the click. Across 765 ads from 18 brands, conversion rate after the click explained about 85% of the difference in cost per purchase between a brand's ads. CPM explained about 20%, and CTR close to none.
- Make ads for buyers. In the same data, hook rate had a negative relationship with ROAS in 12 of 14 brands. The cheapest purchases came from ads that sent people who were already close to buying, and most of that work happens in the ad.
- Keep new ads coming. The top ads in our data kept only 29% of their spend three months later. Waiting until ROAS drops means you're already late. Creative diversity gives Meta different ads for different people.
For more numbers, see our Meta Ads Statistics hub.
Should You Set a ROAS Goal in Meta?
You can. Meta's ROAS goal bid strategy aims to keep return on ad spend near an average you set over the course of the campaign. You enter it as a decimal, so a 110% return is 1.100.
Meta says adherence isn't guaranteed and recommends 50 to 100 or more conversions a week for best performance. So it's a better fit for accounts with steady purchase volume than for small tests.
Either way, the goal you enter should come from the math above, not from a number you read somewhere.
How We Help Brands Hit a ROAS Target at Biddyco
We're a creative agency for Meta ads, so we work on the part of ROAS that comes from the ads themselves. We make UGC, motion, static and hybrid ads for brands spending $100K to $5M a month, and judge them on the result you pay for, like cost per purchase against your break-even ROAS.
Our US-based senior team works across 100+ accounts and $20M+ in monthly spend. New files land every 2 to 4 weeks, and we aim for one round of feedback.
If your ROAS is stuck under target and your ads are the likely reason, talk to us.
FAQ
Is a 3x ROAS good?
It's good if your margin is above 33%, because 3.0x is break-even at a 33% margin. Above that you make money on each order, and below it you lose money unless customers come back.
Is a 2x ROAS good?
Only if your margin is above 50%, or if repeat purchases make up the difference. A 2.0x ROAS means ads cost half of your revenue.
Is a 4x ROAS good?
For most businesses, yes, since it's above break-even for any margin over 25%. But it may also mean you could spend more. A lower ROAS on a bigger budget can leave more profit.
What is a good ROAS for Facebook ads?
The same answer applies: anything above your break-even ROAS, which is 1 divided by your margin. Facebook and Instagram are bought together, so the number covers both. Your Facebook ad costs and order value set where you land.
What's the difference between ROAS and ROI?
ROAS compares revenue to ad spend. ROI compares profit to what you spent. A 3.0x ROAS can still be a negative ROI if your margin is thin.
Can a ROAS below 1 ever make sense?
Yes, if customers reliably buy again. A ROAS under 1.0x means you spent more on the ad than the first order brought in, which subscription brands often accept. It only works if you've measured what those customers are worth over time.
