What Is a Good ROAS?

A good ROAS is any return on ad spend above your break-even ROAS, and your break-even ROAS is 1 divided by your gross margin. A store that keeps 50% of each sale after product, shipping and payment fees breaks even at 2x; one that keeps 25% needs 4x before its ads pay for themselves.

That is why two advertisers can post the same 2.5x and reach opposite verdicts. Benchmarks still show whether a return is plausible for your platform, so this sheet pairs a break-even table with sourced, dated ROAS figures, then covers POAS, MER and the cost of the creative itself.

Break-even ROAS: where a good ROAS starts

ROAS is the revenue your ads bring in divided by what the ads cost. Google's target ROAS help page writes it as a percentage, “$5 USD in sales ÷ $1 USD in ad spend x 100% = 500% target ROAS”, so 5x and 500% mean the same thing (Google Ads Help, About Target ROAS bidding).

Shopify's guide to ROAS adds the part most benchmark lists skip: a good ROAS “depends on your profit margins, operating costs, and advertising goals.”

The margin part is exact arithmetic. Break-even ROAS = selling price ÷ gross profit per order, where gross profit is the price minus cost of goods, shipping, packaging and payment fees. Dividing both sides by the price gives the shortcut: break-even ROAS = 1 ÷ gross margin.

Worked example: an $80 product

Say you sell an $80 product. Goods cost $28, shipping and packaging $8, and payment and platform fees $4, so each order costs $40 to fulfil and leaves $40 of gross profit, a 50% gross margin. Break-even ROAS is 80 ÷ 40 = 2.0x.

Check it with $100 of ad spend. At 2.0x you book $200 of revenue and $100 of gross profit, which exactly repays the ads. At 3.0x you book $300 and $150, leaving $50 of contribution profit; at 1.5x you book $150 and $75, a $25 loss.

The ROAS you need for a profit target

Break-even only means the ads paid for themselves. To keep a set share of revenue as contribution profit, use required ROAS = 1 ÷ (gross margin − target profit margin). At a 50% gross margin, keeping 15% needs 1 ÷ 0.35 = 2.86x: $286 of revenue on $100 of spend yields $143 of gross profit, $43 after the ads, which is 15% of $286.

To run these numbers on your own price and costs, work out your break-even and target ROAS in the free calculator. It also sizes how many creatives a test budget can fund.

Why a higher ROAS is not always better

ROAS usually falls as spend grows, because each extra dollar reaches less likely buyers. Spend $1,000 at 5.0x on a 40% margin and you book $5,000 of revenue, $2,000 of gross profit and $1,000 after ads. Spend $4,000 at 3.5x and you book $14,000, $5,600 of gross profit and $1,600 after ads: a lower ROAS, but more profit.

A very high ROAS on a small budget often means the account is under-spending, or that retargeting and branded search are taking credit for sales that would have happened anyway.

Break-even ROAS by gross margin

Find your gross margin in the first column. Any ROAS above the break-even figure in that row makes contribution profit, and anything below it loses money on every attributed sale. The last column answers the most common version of the question, whether a 3x ROAS is good, as profit or loss per $100 of ad spend.

This table is arithmetic, not a benchmark, so it holds on every platform. A 3x ROAS turns from a loss into a profit between the 30% and 35% rows, because 1 ÷ 3 is a 33.3% margin.

Amazon sellers: ROAS and ACoS

Amazon sellers usually track ACoS, advertising cost of sales, instead of ROAS. ACoS is ad spend ÷ attributed sales, the same ratio upside down: ACoS = 1 ÷ ROAS, so a 4x ROAS is a 25% ACoS. Break-even ACoS equals your gross margin before ad costs.

What is a good ROAS by platform: sourced benchmarks

No ad platform publishes an average ROAS, so every benchmark below is third-party. Each row names the source, its date and a confidence label: "dataset" means a named company's own data, "aggregator" a compilation.

Meta: Facebook and Instagram

Read against the margin table, Triple Whale's ecommerce median of 1.88x means a brand earning that median needs a gross margin of about 53% just to break even on Meta. Focus Digital's all-industry average is higher at 2.19x, but it is an average across many industries rather than an ecommerce median, and it comes from an earlier period.

Focus Digital's own split shows how much the campaign objective matters: a sales-objective median of 4.87x against 0.52x for traffic-objective campaigns.

Facebook ROAS by industry

Focus Digital also splits its Facebook figures by industry. The spread is wide, from 0.5x in food and beverage to 3.5x in finance and insurance, which is one more reason to judge ROAS by your own margin rather than a cross-industry number.

The figures are April 2025 data covering 5,000+ companies, compiled from Varos, Vaizle, SQ Magazine, Triple Whale and its own data. Treat the industry rows as a rough ordering, not as targets for your store.

B2B and lead generation: attributed ROAS

B2B benchmarks use a different yardstick. Dreamdata reports attributed revenue as a percentage of spend across long buying journeys, and Metadata.io reports pipeline created per dollar, which is not revenue at all. Neither is comparable with the ecommerce ratios above.

In ratio terms, Dreamdata's 121% for LinkedIn is 1.21x in attributed revenue.

Google, TikTok and Amazon

Apart from Dreamdata's B2B Google Search figure above, we did not find a Google Ads, TikTok or Amazon ROAS benchmark with a named dataset, a stated period and a page we could fetch on 2026-09-30, so this sheet publishes none. Round figures for those platforms circulate widely without a source behind them. Your break-even ROAS works the same way on every platform, so start there.

Why two ROAS benchmarks rarely match

Sources measuring the same platform rarely agree, as the Meta table shows, and Focus Digital's own objective split runs from 0.52x to 4.87x. Five differences explain most of the gap.

• Median or mean. A mean is pulled up by a few very high-ROAS accounts, while a median is the middle account. Triple Whale reports a median, while Focus Digital's headline figure is an average.
• Objective mix. Sales campaigns are optimised for purchases and traffic campaigns for clicks, so a figure that blends the two lands somewhere between them.
• Attribution window and model. A longer attribution window credits more sales to the ads than a shorter one, and platform-reported ROAS counts conversions that another channel might also claim.
• Sample. Ecommerce brands, B2B software companies and a mixed panel of industries produce different numbers from the same auction.
• Period. Auction prices move with seasons and competition, so a figure built on April 2025 data and one covering Aug 2025–Jul 2026 are not measuring the same market.

Good ROAS by business model

One-time purchase

If most customers buy once, the first order has to carry the ad cost, so first-order ROAS must clear break-even.

Repeat purchase and subscription

If customers come back, you can accept a first-order ROAS below break-even and recover the rest later. Say $100 of spend brings in 3 first orders of $40, a 1.2x first-order ROAS on a 50% margin that loses $40 on day one. If each customer places 2.5 orders in their first year, counting the first, those 3 customers produce $300 of revenue and $150 of gross profit: a 3.0x twelve-month ROAS and $50 of profit.

The risk is the payback period. Only count repeat revenue you have measured in your own cohort data, and make sure you can fund the gap until it arrives.

Lead generation and B2B

When the conversion is a form fill, ROAS cannot be measured at the click. Track cost per lead and cost per qualified opportunity, then compare revenue with spend once deals close, which on long B2B cycles can be months later.

ROAS vs POAS vs MER

ROAS answers whether the ads returned more revenue than they cost. POAS and MER answer two questions ROAS cannot: whether the ads returned profit, and whether all your marketing together is working.

POAS in one example

Take the $80 product again at 3.0x: $300 of revenue on $100 of spend. Gross profit is $150, so POAS is 150 ÷ 100 = 1.5, and anything above 1.0 is profitable before overheads. POAS matters when a catalogue mixes a 70%-margin accessory with a 20%-margin hero product, because the same ROAS means very different profit on each.

MER: the blended check

MER divides all revenue, including organic and repeat orders, by all marketing spend. It cannot tell you which ad worked, but platform tracking gaps cannot distort it, which makes it the check on platform-reported ROAS. To compute ROAS alongside CPA, CPM and CTR from one set of numbers, use the free ad metrics calculator for ROAS, CPA and CPM. Upstream, what counts as a good CPM is judged the same way, by the CPA it implies.

All-in ROAS: where creative cost changes the maths

Standard ROAS leaves out what the ads cost to make. For a brand producing a steady flow of video creative, that cost can decide whether a campaign is profitable, and none of the benchmark sources above include it. All-in ROAS puts it back: attributed revenue ÷ (ad spend + creative spend).

Worked example: a month of UGC ads

The inputs here are illustrative, not benchmarks. A brand spends $10,000 on ads in a month and books $30,000 of attributed revenue, a 3.0x platform ROAS. It also commissions 15 creator videos, and Billo's compilation of UGC rates puts the market average at $200 per video (Billo, UGC Rates, 2026-06-16) before usage rights, so the batch costs $3,000.

All-in ROAS is $30,000 ÷ $13,000 = 2.31x. On a 50% margin that still clears the 2.0x break-even: $15,000 of gross profit covers $13,000 of spend with $2,000 to spare. On a 40% margin the break-even is 2.5x, so the platform's 3.0x looks healthy while the month lost $1,000: $12,000 of gross profit against $13,000 of spend.

Usage rights widen the gap. Billo notes that licensing “can easily double or triple costs”, and creator fees rise with experience, from $50–$100 per video for entry-level creators to $500+ per video for established ones.

How many videos the denominator has to carry

A batch of 15 videos is a modest month. TikTok's creative guidance for advertisers points to 9 to 25 distinct creatives for a single campaign at launch, before any refresh. At a per-video fee, all-in ROAS falls with every idea you add, so teams often test fewer ideas than the platform suggests.

AI-made creative in the all-in denominator

Generated video moves creative spend from a per-video fee to a monthly plan. On Playcut that plan is $9 (Hobby, 500 credits), $29 (Pro, 2,000), $79 (Studio, 6,000 credits and four seats) or $149 per seat (Agency, 10,000 credits per seat). One-time credit packs, 600 for $9, 2,500 for $35 and 5,000 for $65, never expire.

A 10-second, 720p talking-actor clip from Playcut's Act app costs 85 credits on the default fastest tier and 315 credits on the plus tier, which holds the actor's identity best. At 85 credits each, Pro's 2,000 monthly credits cover 23 of them, and failed generations are refunded. In the all-in formula, creative spend becomes the plan price plus any packs you buy.

That is the model behind AI UGC ads that ship many variants from one actor, AI product ads that keep the same actor and SKU and Meta video ad creative built for testing. Lower creative cost changes the denominator, not the conversion rate. No source in this sheet shows AI-made UGC earning a higher ROAS than creator-made UGC, so test the two against each other and judge the winner by all-in ROAS against your break-even.

One rule applies whoever makes the video. An AI actor can present, demonstrate or dramatize a product, but it must not pose as a real customer describing an experience: the FTC's final rule on fake reviews and testimonials bans reviews and testimonials that misrepresent that they are “by someone who does not exist, such as AI-generated fake reviews”. See what the FTC rules mean for AI UGC; this is not legal advice.