Since your product sells for $0.00 and costs $0.00 to make, you need to have an ROAS of 0.00 to break even on ad spend, anything above you're profiting from your ad spend. Calculate your ROAS using our ROAS calculator.
Break-even ROAS is the minimum return on ad spend you need to cover the cost of your advertising. In other words, it’s the point where you’re not losing money, but you’re also not making a profit.
For example, if your break-even ROAS is 2.5 (or 250%), it means you need $2.50 in revenue for every $1 spent on ads just to cover your costs.
Knowing your break-even ROAS is like having a compass for your ad campaigns. It helps you make better decisions and avoid wasting money. Here’s why it matters:
1. Sets a Baseline for Success
If your ROAS is below your break-even point, you’re losing money on ad spend. This baseline tells you whether your campaign is working or needs improvement.
2. Helps With Budgeting
Understanding your break-even ROAS ensures you only scale campaigns that are profitable or have the potential to be profitable.
3. Informs Pricing and Strategy
Your break-even ROAS is tied to your profit margins. It helps you assess whether your pricing, product costs, or ad spend strategy need adjustments.
4. Supports Long-Term Growth
When you know your break-even point, you can focus on exceeding it, which means turning your ad spend into profit and fueling sustainable growth.
To calculate your break-even ROAS, use this simple formula:
Break-Even ROAS = 1 ÷ Profit MarginExample:
If your profit margin is 40% (0.4):
Break-Even ROAS = 1 ÷ 0.4
Break-Even ROAS = 2.5
This means you need a ROAS of at least 2.5 (or 250%) to break even.
Handy little tools to speed up your work.
Generate good Google Ads copy with just a few inputs. 7-day free trial with all the features
