Advertising economics / ROAS
Two ROAS thresholds, two decisions.
Break-even tells you where the ad stops paying for itself. Target ROAS adds the profit room you actually want.
Updated September 1, 2026 · Illustrative education, not accounting or tax advice.
Keep the ratios straight
ROAS is attributed revenue divided by ad spend. ACoS is ad spend divided by attributed revenue. Neither ratio includes your product economics until you bring in the costs that must be paid when the order converts.
The break-even line
Break-even ROAS = revenue ÷ contribution available for ads
A target ROAS above the break-even line leaves more room for profit. A target below it may be an intentional growth investment and should be labeled that way.
Use one product and one period
Run the scenario in the break-even ROAS calculator. Compare current ROAS, break-even ROAS, target ROAS, and allowable ad spend. Then change return rate or fulfillment cost to see how quickly the threshold moves.
What this does not answer
- Platform attribution windows can change the reported ratio.
- ACoS and ROAS do not replace a full profit and loss view.
- Organic halo effects need a separate measurement approach.