What's a good ROAS, and why are you asking the wrong question?

Everyone wants a benchmark. "What's a good ROAS?" is one of the most asked questions in advertising. The problem: ROAS without margin context means nothing. A ROAS of 5 can mean you're losing money. A ROAS of 2 can mean you're doing well. The number alone doesn't tell you the difference.

What is ROAS?

ROAS stands for Return on Ad Spend: the revenue you generate per euro spent on ads. The calculation is simple:

Platforms like Meta Ads Manager and Google Ads report ROAS by default. It looks concrete and measurable. The problem is what it doesn't tell you.

Why ROAS is misleading

ROAS measures revenue, not profit. Say you have a gross profit of 20% on your products, after cost of goods, packaging and shipping. Then your situation looks like this:

• €4,000 revenue × 20% margin = €800 gross margin
• €800 ad spend = you break even - ROAS of 5, zero profit

With 60% margin, that same ROAS of 5 is excellent. With 15% margin, you need a ROAS of 5 just to break even, and a lot more to be profitable. ROAS without margin is a number without context.

What's your break-even ROAS?

The only ROAS that matters is the ROAS at which you exactly break even - the break-even ROAS. You calculate it like this:

Anything above that 2.5 is profit. Anything below it is a loss. That's the number you steer your campaigns on, not some random benchmark from an article.

Calculate your own break-even ROAS

Enter your own selling price and costs and see instantly what your break-even ROAS is, both including and excluding VAT, as you'd read it in Meta Ads Manager.

Which metric is better than ROAS?

In practice, two alternatives work better:

• MER (Marketing Efficiency Ratio): total revenue ÷ total ad spend across all channels. Gives a holistic view and sidesteps attribution problems between platforms
• Profit per order: what's left after all costs, including ad spend, per order? This is the number that actually matters to the business owner

At Momenti, we always steer on margin, not ROAS. That requires an honest conversation about your cost price and margin structure, but it delivers decisions that hold up.

Does this sound too technical? We understand. This is exactly where a specialist makes the difference: someone who runs the numbers for you, calmly explains what they mean, and takes it fully off your hands. The no-obligation account analysis is the first step for that.

So are there no benchmarks at all?

There are sector averages, but they're less useful than they seem. A ROAS of 3 to 6 is common in e-commerce, but that means nothing if your margin is 15%. Use benchmarks only to check whether you're way outside the market, never as a target.

The only target that matters: your break-even ROAS plus the profit margin you need to grow.