The arithmetic
ROAS = revenue from ads ÷ ad spend. Spend $1,000, get $5,000 of attributed sales back, that is 5x.
On its own the number says nothing about profit. It compares revenue to spend and skips product cost, so the same 5x is excellent on an 80% margin product and barely alive on a 25% one.
Where the two inputs come from
In Google Ads, the column you want is Conv. value / cost in the Campaigns table — add it through the Columns menu under Modify columns. Google reports it as a ratio, which is ROAS.
In Meta Ads Manager it is the Purchase ROAS column. Before you trust it, open the ad set and look at the attribution setting. The default is 7-day click and 1-day view, and it counts people who clicked or saw the ad and bought later — including purchases your order system may credit to something else.
Amazon does not report ROAS. It reports ACOS, which is the same relationship inverted: 25% ACOS is 4x ROAS, and there is a converter if you need to move between them.
Whatever platform you pull from, it will usually look better than your own books. Meta is counting clicks; Shopify is counting orders. The gap is the honest number.
Same 5x, different bank balance
Two stores both report 5x on $2,000 of spend and $10,000 of revenue.
| Store | Gross margin | Gross profit before ads | After $2,000 spend | |
|---|---|---|---|---|
| Digital product | 80% | $8,000 | $6,000 | |
| Apparel reseller | 30% | $3,000 | $1,000 |
The second store could double its spend, hit 5x again, and have nothing left. Nothing in a ROAS dashboard warns you, because the dashboard does not know your margin. Enter it above and the calculator drops below the break-even line when the campaign stops paying.
The break-even line
Break-even ROAS = 1 ÷ gross margin. At 60% margin you need 1.67x before a cent of profit; at 25% you need 4x.
That is also the number to put into Google or Meta as your target ROAS — but not exactly. Set the target at break-even and the bidding algorithm will optimize you to zero profit. Aim above it. The target ROAS calculator works out what "above" should be for your margin.
When ROAS is high and profit is not
Two situations worth checking before you scale.
Very high ROAS on a small budget usually means under-spending, not winning. If 9x comes from a $200 campaign, the constraint is budget or audience size, not efficiency — raising spend will lower the ratio and probably raise total profit.
Flat ROAS while revenue grows means margin is eroding somewhere else: discounts, shipping subsidies, returns. Check average order value and contribution margin before concluding the ads are fine.
For a single number across paid and organic, use blended ROAS. For the difference between ROAS and full-cost ROI, see ROAS vs Marketing ROI.