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Ecommerce

ROAS explained: platform ROAS vs. real revenue, and how to find your break-even

By Vector Scale MarketingPublished October 20267 min read
Calculator, cash and receipts on a desk
ROAS (return on ad spend) is the revenue attributed to your ads divided by what you spent on them. If you spend 1,000 and the platform attributes 5,000 in sales, ROAS is 5x. It's a useful signal, but platform ROAS isn't the same as profit, or even the same as the revenue in your bank account.

Why platform ROAS and real revenue differ

  • Attribution: each platform credits itself for sales it influenced. Google and Meta may both claim the same order.
  • What's in the value: conversion values often include tax and shipping, which you don't keep as revenue.
  • Returns and cancellations: these usually aren't removed from platform figures.
  • Modelled conversions: some conversions are estimated when tracking is limited by consent or browsers.

None of this makes platform ROAS useless. It's the signal campaigns optimise on. But your store or accounting data should be the source of truth.

Find your break-even ROAS

Break-even ROAS is the point where ad-driven revenue just covers product costs and ad spend. A simple version is:

Break-even ROAS = 1 ÷ gross margin
Example: with a 40% gross margin, break-even ROAS is 1 ÷ 0.40 = 2.5x. Below 2.5x, each sale costs you money once product costs are covered. Above it, you're contributing to profit.

For a more accurate figure, use your margin after shipping, payment fees and typical returns. If customers often buy again, you may accept a lower first-order ROAS. That's a business decision, not a platform setting.

Read ROAS alongside other numbers

  • Compare platform-reported revenue with actual orders in your store.
  • Look at total revenue ÷ total ad spend across all channels as a sense check.
  • Separate brand and non-brand results. Brand campaigns often show high ROAS because those customers were already looking for you.

How we report ROAS

In our case studies we always state where a ROAS figure comes from, whether that's the ad platform or the business's own records, and what it includes. See our results →

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