what is a good roas

Return on ad spend (ROAS) equals revenue attributed to ads divided by ad spend. A 4.0 ROAS means $4 of attributed revenue for each$1 spent.

A good ROAS depends on margin

Break-even ROAS before other variable costs is approximately 1 / gross margin. At a 40% gross margin, the gross-margin break-even is 2.5. Fulfilment, payment fees, returns, agency costs, and overhead raise the required target.

Use the right attribution window

Compare campaigns with consistent conversion definitions and windows. Incremental lift can be lower than platform-attributed revenue when channels claim the same conversion.

Limitations

ROAS is not profit. It excludes costs outside ad spend and can be distorted by attribution, delayed conversions, repeat customers, and brand demand.