Breakeven ROAS
financialBreakeven Return on Ad Spend
Definition
The minimum ROAS needed to cover all costs and achieve $0 profit. Critical for setting bid strategies.
How to Calculate Breakeven ROAS
1 ÷ Gross Margin Percentage
Example
Scenario: Product has 40% gross margin
Calculation: 1 ÷ 0.40 = 2.5x breakeven ROAS
What's a Good Breakeven ROAS?
Should aim for 25-50% above breakeven ROAS for profitability buffer
Common Mistakes
- Not accounting for refunds and chargebacks
- Using revenue margin instead of contribution margin
💡 Expert Tip
Always bid above breakeven ROAS to account for attribution gaps and measurement errors. Add 20-30% buffer minimum.
— Based on $100M+ in managed ad spend
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By Kristijan Arapov • Based on $100M+ in managed ad spend • Updated 2026