If your break-even ROAS is 1.5×, any ad performing below that number is burning your budget. Switch it off immediately.
It is the most useful number on this site because it turns a vague question — "is 2.8× good?" — into a yes or no. Industry benchmarks cannot do that. Your margin can.
What it looks like by margin
High margin (SaaS, info products)
Break-even ROAS ≈ 1.25×. You can afford aggressive bidding and long payback windows.
Typical e-commerce brand
Break-even ROAS = 2.5×. Below that you are paying for the privilege of shipping boxes.
Reseller or dropshipping
Break-even ROAS = 5×. Thin margins leave almost no room for testing — creative quality is everything.
The pattern is worth internalising: break-even rises steeply as margin falls. Going from 50% to 40% margin moves your target from 2× to 2.5×; going from 25% to 20% moves it from 4× to 5×. Every point of margin you win at the buying or pricing stage is worth more than an equivalent effort in the ad account.
Reading the gauge
Under the results, the calculator draws a gauge with a marker at the halfway point. That marker is your break-even. The bar fills from the left, and:
- Bar short of the marker — the campaign is below break-even and losing money on every additional unit of spend.
- Bar level with the marker — exactly break-even. Any dip in performance turns it negative.
- Bar past the marker — profitable. The further right, the more headroom you have to raise bids or budget.
The verdict line above the numbers puts the same thing in words, including how many times over break-even you currently are.
Target ROAS is not break-even ROAS
Break-even is the floor, not the goal. Running a campaign exactly at break-even means working for free — no contribution to salaries, rent, software or profit. Most operators set a target ROAS somewhere above break-even to cover fixed costs and leave a margin for error.
A practical rule: work out the monthly fixed costs the campaign has to help carry, express them as a share of the revenue it produces, and add that to your break-even. If break-even is 2.5× and fixed costs eat 15% of revenue, a target nearer 3.0× keeps the business whole.
When break-even ROAS cannot be reached
If your cost of goods is higher than the revenue those goods generate, gross margin is negative and no advertising performance can make the campaign profitable. The calculator shows N/A rather than a misleading multiple. The fix is never in the ad account — it is pricing, supplier cost, or bundling to lift average order value.
Break-even and lifetime value
Everything above treats a purchase as a one-off. If customers reliably buy again, you can justify a first-purchase ROAS below break-even and recover the difference later — this is how subscription and consumable brands outbid everyone else. It is also how businesses run out of cash. Only do it when repeat rates come from your own cohort data, and check that your cash flow survives the payback window.