What is break-even ROAS?
Return on ad spend (ROAS) measures how much revenue you earn for every dollar spent on advertising. Break-even ROAS is the minimum ROAS needed just to cover your product costs, at which point an ad campaign is neither making nor losing money. Any ROAS above this threshold means the campaign is profitable; below it, you are losing money on every sale even though the campaign is generating revenue.
The formula
Break-even ROAS is calculated as 100 ÷ Contribution Margin %, where contribution margin is what’s left of the selling price after subtracting the cost of goods sold and other variable costs (such as shipping or payment processing fees) expressed as a percentage of price. For example, a product with a 40% contribution margin needs a break-even ROAS of 2.5x — meaning $2.50 in revenue for every $1 of ad spend — just to cover its costs.
This calculator is for general marketing planning and educational purposes. It does not account for fixed overhead, returns, or other business costs, so your actual profitable ROAS target may be higher than the break-even figure shown here.