Quick ROAS Evaluation
Use this table to quickly assess your ROAS performance:
| Your ROAS | Rating | What It Means |
|---|---|---|
| < 1× | 🔴Poor | Losing money on every sale |
| 1× - 2× | 🟡Break-even | Covering costs, little to no profit |
| 2× - 4× | 🟢Good | Profitable, room to grow |
| 4× - 6× | 🟢Great | Strong performance |
| > 6× | ⭐Excellent | Top performer |
⚠️ These are general guidelines. Your actual target depends on your profit margins.
What Determines a "Good" ROAS?
There's no universal answer because "good" ROAS varies based on several factors:
Factor 1: Profit Margin
This is the #1 factor. Higher margins mean you can profit at lower ROAS. A 70% margin business breaks even at 1.43× ROAS, while a 30% margin business needs 3.33× just to break even.
📊 70% margin → Break-even at 1.43× | 30% margin → Break-even at 3.33×
Factor 2: Industry
Different industries have different average ROAS due to varying profit margins, competition, and customer lifetime value.
📊 E-commerce: 2-4× average | SaaS: 5-7× average (higher LTV)
Factor 3: Business Goals
Growth-focused companies may accept lower ROAS for market share. Profitability-focused companies need higher ROAS.
📊 Growth mode: Accept 2× ROAS | Profit mode: Target 5× ROAS
Factor 4: Ad Platform
Different platforms have different benchmarks due to audience intent and competition.
📊 Google Search: Higher intent, typically better ROAS | Social: Lower intent, varies more
Need to find your break-even ROAS? Use our calculator to find the minimum ROAS you need based on your profit margins.
Break-even ROAS Calculator →Good ROAS by Industry
Here are typical ROAS benchmarks by industry:
| Industry | Average | Good | Excellent |
|---|---|---|---|
| E-commerce (General) | 2.5× | 4×+ | 6×+ |
| Fashion & Apparel | 2.5× | 4×+ | 6×+ |
| SaaS / Software | 4× | 6×+ | 8×+ |
| Lead Generation | 3× | 5×+ | 7×+ |
| Retail | 2× | 3×+ | 5×+ |
| B2B Services | 3× | 5×+ | 7×+ |
These benchmarks are based on industry averages. Your specific niche may vary.
How to Evaluate Your ROAS
Follow these steps to determine if your ROAS is good for your business:
Calculate Your Break-even ROAS
First, find the minimum ROAS you need to cover costs. This is your floor — anything below this means you're losing money.
Break-even ROAS = 1 ÷ Profit MarginCompare to Industry Benchmarks
See how your ROAS stacks up against others in your industry. Are you above or below average?
Consider Your Business Context
Factor in your growth stage, campaign goals, and customer lifetime value. A lower ROAS might be acceptable for new customer acquisition if LTV is high.
What If Your ROAS is Too Low?
If your ROAS is below your target, here are ways to improve it:
Optimize Ad Targeting
Narrow your audience to higher-intent users
Improve Landing Pages
Increase conversion rates with better UX
Increase Average Order Value
Upsells, bundles, and cross-sells
Reduce Product Costs
Better suppliers or bulk pricing
Adjust Bidding Strategy
Use Target ROAS bidding if available
For a complete guide, see our How to Improve ROAS guide →
Check Your ROAS
Use our calculator to see where you stand.
Check Your ROAS
Enter your numbers below
Your ROAS
For every $1 spent, you earn 4 in revenue.