BE-ROAS – Break-Even ROAS

Definition

Break-Even ROAS indicates the minimum ROAS a campaign must achieve to cover costs. It is calculated from the profit margin and forms the basis for deciding whether a campaign should be scaled, optimized, or stopped.

Formula

Example

With a 25% profit margin, break-even ROAS is 1 / 0.25 = 4.0. Any campaign with ROAS above 4.0 is profitable, anything below destroys margin. With 40% margin, break-even ROAS drops to 2.5.

Optimization Tips

Calculate break-even ROAS for each product category separately. Set it as minimum target in your bidding strategies. Also consider repeat orders (CLV) for a long-term perspective.