Free advertising tool
ROAS is revenue divided by ad spend. Break-even ROAS asks a more useful planning question: how much return can your order support after the variable costs required to deliver it? Use contribution margin, not revenue alone, to find that threshold, then optionally set the profit you want to retain on each order.
Net revenue the business keeps, without sales tax or pass-through shipping.
What is left after the variable costs of delivering the order, before ad spend.
Blank or $0 means break-even.
Include
Leave out
Break-even ROAS
2.50x
Why margin moves the target so much
Break-even ROAS is one divided by your margin. It hardly moves while margins are healthy and climbs quickly as they thin, so a few points of margin matter far more on a low-margin order.
Worked examples
$100 revenue · 40% margin · no target
Leaves $40.00 in contribution dollars, so the maximum break-even ad spend is an Allowable CPA of $40.00 and break-even ROAS is 2.50x.
$100 revenue · 40% margin · $10 target profit
Leaves $30.00 for advertising after retaining $10.00 per order, so the target ROAS is 3.33x. Google Ads takes that as 334%, rounded up so the setting never asks for less than the target needs.
$100 revenue · 0% margin · no target
There are no contribution dollars available to pay for advertising. The result is Undefined, not Infinity, 0x, or an implied performance promise.
How the formula works
marginRate = contribution margin ÷ 100
contribution dollars = revenue per order × marginRate
break-even ROAS = revenue per order ÷ contribution dollars
With a profit target, subtract that target from contribution dollars first. The result is the target allowable CPA, and revenue divided by that CPA is the ROAS required to retain the target. Intermediate values are not rounded; dollars and ROAS are displayed to two decimal places.
Google Ads takes Target ROAS as a percentage: conversion value divided by ad spend, times 100. Google's own example is $5 in sales for every $1 of spend, entered as 500%. The calculator rounds up to a whole percent. Google bids on the conversion values it records, averaged across conversions, so the setting only protects your margin when those values are the same revenue you entered here. If your conversions are lead values or a flat $1, the percentage means something else. (Source: Google Ads Help, About Target ROAS bidding.)
Assumptions and limitations
Break-even means profit exactly zero after the included variable costs and ad spend. It is not the ROAS that guarantees profitability. The tool does not infer an industry margin or promise campaign performance.
Revenue should be net revenue retained by the business. Sales tax collected for a tax authority and pass-through shipping should not be treated as revenue unless their matching costs are also included. If revenue is already net of refunded revenue, include only non-recovered return handling or fulfillment costs in any refund allowance.
Fixed salaries, rent, software subscriptions, marketing retainers, fixed overhead, income tax, financing costs, owner distributions, and advertising spend do not belong in contribution margin. Those costs may matter to a wider business model, but adding them here would change the question this calculator answers.
Give each lead conversion a real value: your average sale times the share of leads that become customers. In Google Ads, open Goals, Conversions, Summary, click the action, then Edit settings and Value. Then change the amount your call tracker sends, which can default to 1. Changes apply only to new conversions.
Create Qualified lead and Converted lead actions in Google Ads, keep each lead's click ID and email, and upload each stage once with its real value and the lead's ID as order ID. Wait for the final amount: a resend of the same conversion is dropped, and an upload without a click ID may never be correctable.
Open Goals, Conversions, Summary and note which goals are account-default and which actions in them are Primary. Then read each campaign's Conversion goals setting. A campaign that bids for conversions chases the primary actions in its goals, plus every action in a custom goal. The rest is mostly for observation.
Create the import conversion action first and wait 4 to 6 hours. Fill Google's template with each sale's click ID, the exact action name, the conversion time with its time zone and a value, then upload it under Goals, Conversions, Uploads. Conversions are filed under the ad click's date, and only clicks from the last 90 days count.
Because Google Ads counts what your conversion actions track, not the leads you got. The usual causes are one lead tracked by two actions, lead actions set to count every conversion instead of one, and phone number taps or page views counted as conversions. Find the action behind the extra count, then fix it under Goals, Conversions.
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