Ad costs and benchmarks · Guide
What is a good ROAS? Break-even and benchmarks
By Limon Ghosh, Sydney · Updated 24 October 2026 · 7 min read
Short answer: a good ROAS is one above your break-even, and break-even ROAS is 1 divided by your gross profit margin. With a 40% margin you need at least 2.5x. Industry medians are only a guide: published figures range from about 1.0x to about 6.1x depending on the industry and platform.
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ROAS in one minute
ROAS (return on ad spend) is the sales your ads bring in divided by what you spent on them. Spend $1,000 and get $3,000 in sales, and your ROAS is 3.0x.
ROAS is revenue, not profit. A 3.0x ROAS can still lose money if your product, shipping and fees eat most of the sale.
Find your break-even ROAS first
Break-even ROAS is the point where your ads cover your variable costs. Shopify gives the formula as 1 divided by your gross profit margin. Variable costs include product cost, shipping, payment fees and pick-and-pack.
Break-even ROAS by gross margin
The return you need just to cover product and fulfilment costs
Source: Formula: break-even ROAS = 1 ÷ gross profit margin (Shopify). Values calculated by MindfulClicks.
View as table
| Item | Value |
|---|---|
| 20% margin | 5.00x |
| 30% margin | 3.33x |
| 40% margin | 2.50x |
| 50% margin | 2.00x |
| 60% margin | 1.67x |
Example from Shopify: a $100 product with $60 of variable costs has a 40% margin, so the break-even ROAS is 2.5. Aim above that to cover overheads and leave profit. Our free wasted ad spend checker does the sum for you.
What the benchmarks say
These are medians. Half of advertisers are above and half below, so they tell you where you stand, not what is possible.
Median ROAS by industry: Google Ads vs Meta Ads
2025 medians, based on Varos data as reported by Landingi
Source: Landingi, citing Varos, 2025. Sample size is not stated, and another site shows different values for the same industries, so treat these as indicative.
View as table
| Item | Google Ads | Meta Ads |
|---|---|---|
| Toys | 6.07x | 2.69x |
| Sports and fitness | 4.35x | 2.41x |
| Books | 4.31x | 0.98x |
| Baby | 4.00x | 4.39x |
| Fashion | 4.07x | 2.65x |
| Home and garden | 3.90x | 2.60x |
| Electronics | 3.76x | 2.95x |
| Beauty | 3.57x | 1.57x |
| Entertainment | 3.52x | 3.27x |
| Food and beverages | 3.45x | 1.67x |
| Education | 2.58x | 1.54x |
| Healthcare | 2.24x | 1.20x |
Same industry, different platform. Google search usually returns more than Meta in this data because people searching are closer to buying. Baby is the exception, where Meta was slightly higher (4.39 against 4.00).
ROAS, MER and POAS: which to use
| Measure | What it is | Best for |
|---|---|---|
| ROAS | Revenue attributed to ads ÷ ad spend | Judging one campaign or channel |
| MER | Total revenue ÷ total marketing spend | Judging the whole business |
| POAS | Gross profit from ads ÷ ad spend | Seeing real profit, since ROAS ignores product cost |
Sources: Shopify on MER and Relevant Audience on POAS.
Shopify cites an Eightx 2026 benchmark study that puts a healthy blended MER at about 3.0x to 5.0x. Shopify advises using ROAS and MER together, because ROAS can look good while the business as a whole does not.
How to raise your ROAS
- Fix trackingIf sales are missing from your reports, your ROAS looks lower than it is and ad platforms cannot learn. See our GA4 guide.
- Improve the offer and pageA better conversion rate raises ROAS without spending more.
- Cut weak spendPause campaigns that stay below break-even after a fair test.
- Raise average order valueBundles and thresholds increase sales per click.
- Review weeklyCheck ROAS, MER and profit together.
Sources
- Shopify: break-even ROAS calculator
- Shopify: marketing efficiency ratio
- Landingi: what is a good ROAS (citing Varos)
- Relevant Audience: ROAS, break-even ROAS and POAS
Questions answered
What is a good ROAS for ecommerce?
One above your break-even. Break-even ROAS is 1 divided by gross margin, so a 40% margin needs 2.5x. Published medians for Google and Meta range from about 1.0x to about 6.1x depending on the industry and platform.
What is the difference between ROAS and MER?
ROAS divides the revenue attributed to ads by ad spend and is used for a campaign or channel. MER divides total revenue by total marketing spend and is used for the whole business. Shopify advises using both.
Is a 4x ROAS good?
It depends on your margin. At a 25% margin, 4x is exactly break-even. At a 50% margin it is twice break-even. Always compare with your own break-even.
What is POAS?
POAS is profit on ad spend. It replaces revenue with gross profit, so a value above 1 means your ads returned more gross profit than they cost.
Why is my Meta ROAS lower than Google?
In published data Meta ROAS is usually lower than Google search ROAS for most industries, because Meta reaches people who are not searching yet. The two platforms do different jobs, so judge them on your overall MER too.
Limon Ghosh runs MindfulClicks from Sydney and manages paid ads, tracking and Claude AI automation for online stores and B2B companies in Australia and the USA.
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