Return on Ad Spend (ROAS) is the revenue generated for every dollar spent on advertising. A 3× ROAS means you made $3 for every $1 spent.
How to calculate ROAS
ROAS = Revenue from ads ÷ Ad spend
If you spent $10,000 on Meta ads and generated $35,000 in tracked sales, your ROAS is 3.5×.
What is a good ROAS?
It depends on your margins. A business with 60% gross margin needs a lower ROAS to be profitable than one with 20% margins. The break-even ROAS is roughly: 1 ÷ gross margin percentage.
For a 40% margin business, break-even ROAS is 2.5×. Anything above that is profit.
Why your ROAS might be wrong
Attribution is the most common issue. If you are using last-click attribution and a customer saw your Meta ad, then Googled you and converted — that sale gets credited to Google, not Meta. Your Meta ROAS looks worse than it is.
Three ways to improve ROAS without increasing spend
1. Improve your landing page conversion rate. Doubling CVR from 1% to 2% doubles ROAS without touching your ad account. 2. Improve average order value. Higher AOV means more revenue per click. 3. Tighten audience targeting. Removing low-intent audiences reduces wasted spend.