Short answer: A good ROAS depends on your margins and business model, but as a rule of thumb: e-commerce should target 6-8x, professional services 8-15x, healthcare 10-15x, home services 5-8x, real estate 15-25x, and SaaS 5-8x (or an LTV:CAC ratio of 3:1). Google Search Ads deliver the highest average ROAS at 3-5x, ahead of Facebook/Instagram at 3-5x.
"What's a good ROAS?" is one of the most common questions we hear from Australian businesses running Google Ads or Meta Ads, and it is one of the first things we assess for clients of our PPC agency. The answer isn't a single number - it depends on your industry, margins, business model, and growth stage. But there are clear benchmarks you can use to evaluate performance.
What Is ROAS?
ROAS (Return on Ad Spend) measures how much revenue you generate for every dollar spent on advertising.
ROAS = Revenue ÷ Ad Spend
A ROAS of 4.0 means you generate $4 in revenue for every $1 spent on ads. Sounds great - but is it actually profitable? That depends entirely on your margins.
ROAS vs ROI: The Critical Difference
ROAS measures revenue, not profit. If your ROAS is 4.0 but your profit margin is 20%, your actual return looks like this:
- Revenue per $1 ad spend: $4.00
- Profit per $1 ad spend: $0.80 (20% margin)
- Actual return: -$0.20 per $1 spent once you account for the ad spend itself, management fees, and other costs
This is why a "good" ROAS varies dramatically by industry - a business with 60% margins needs a much lower ROAS to be profitable than a business with 15% margins.
ROAS Benchmarks by Industry (Australia 2026)
E-commerce & Retail
- Average ROAS: 4.0-6.0x, Good: 6.0-8.0x, Excellent: 8.0x+
- Typical margins: 30-50%, so breakeven ROAS is approximately 2.0-3.3x
Professional Services (Lawyers, Accountants, Consultants)
- Average ROAS: 5.0-8.0x, Good: 8.0-15.0x, Excellent: 15.0x+
- High margins (60-80%) and high lifetime value make even expensive clicks profitable
Healthcare (Dentists, Med Spas, Specialists)
- Average ROAS: 6.0-10.0x, Good: 10.0-15.0x, Excellent: 15.0x+
- High patient lifetime value means strong ROAS is achievable even with higher-cost clicks
Home Services (Plumbers, Electricians, HVAC, Roofing)
- Average ROAS: 3.0-5.0x, Good: 5.0-8.0x, Excellent: 8.0x+
- Variable margins (emergency jobs are higher margin); focus ROAS measurement on high-value jobs, not small repairs
Real Estate
- Average ROAS: 8.0-15.0x, Good: 15.0-25.0x, Excellent: 25.0x+
- Commission-based revenue per sale makes even high click costs extremely profitable
SaaS & Technology
- Average ROAS: 3.0-5.0x (first-month revenue only), Good: 5.0-8.0x
- Key metric: LTV:CAC ratio of 3:1 is the gold standard, since subscription models mean first-month ROAS understates true value
ROAS Benchmarks by Channel
- Google Search Ads: 4.0-6.0x average - highest ROAS channel due to high purchase intent; improving Quality Score lowers CPCs and boosts ROAS
- Google Shopping Ads: 5.0-8.0x average - highest ROAS for ecommerce, since the visual format drives qualified clicks
- Facebook/Instagram Ads: 3.0-5.0x average - lower intent than search but broader reach; best for awareness and retargeting
- YouTube Ads: 2.0-4.0x average - best for brand awareness and consideration; harder to attribute direct conversions
- LinkedIn Ads: 2.0-4.0x average, but deal values are much higher for B2B - CPCs are the highest of any channel but audience precision offsets cost for high-value sales
Why Your ROAS Might Be Misleading
- Attribution window - Google defaults to 30-day click attribution; changing this to 7 days or 90 days dramatically changes reported ROAS
- Cross-channel influence - a user might click a Facebook ad, then search your brand name on Google and convert there. Google Ads gets the credit, Facebook gets nothing
- New vs returning customers - a 3.0x ROAS on new customers is excellent; the same ROAS on existing customers who would have bought anyway is wasteful spend
- Revenue vs profit - a 10.0x ROAS on a 10% margin product is barely profitable once all costs are counted
How to Improve Your ROAS
- Fix your landing pages - a better landing page increases conversion rate, which directly increases ROAS
- Tighten targeting - eliminate wasted spend on irrelevant audiences and keywords
- Increase average order value - upsells and bundles boost revenue per conversion without increasing ad spend
- Improve Quality Score - lower CPCs mean more clicks for the same budget
- Retarget intelligently - remarketing typically delivers noticeably higher ROAS than prospecting to cold audiences
Working Out Your Own Breakeven ROAS
Industry benchmarks are a starting point, not a target you should chase blindly. The number that actually matters for your business is your breakeven ROAS - the point at which ad spend stops being a cost and starts being profit. Work it out by dividing 1 by your profit margin as a decimal. A business with a 25% margin has a breakeven ROAS of 4.0x, meaning anything below that is losing money on every sale once ad spend is the only cost considered, and anything above it is genuinely profitable. Once you know your breakeven number, industry benchmarks become useful context rather than an arbitrary goal.
How Business Model Changes the Target
Two businesses in the same industry can have very different good ROAS targets depending on how they make money. A subscription business that expects customers to stay for 12 months can accept a much lower first-purchase ROAS than a one-off transaction business, because the lifetime value recovers the acquisition cost over time. Similarly, a business with a strong upsell or cross-sell process at checkout can tolerate a lower ROAS on the initial ad click, since the average order value grows after the click converts. This is why comparing your ROAS to a competitor's without knowing their margin structure and average customer lifetime tells you very little.
Common Mistakes When Setting ROAS Targets
- Copying a benchmark without checking margins: a target that works for a competitor with 50% margins can be unprofitable for a business with 20% margins
- Setting one blended target across all campaigns: prospecting and remarketing campaigns serve different purposes and should be judged against different ROAS expectations
- Chasing ROAS at the expense of scale: a campaign with an extremely high ROAS but tiny spend may be leaving growth on the table by targeting too narrow an audience
- Ignoring seasonality: a ROAS target set in a quiet trading month can look unrealistic during a peak sales period, and vice versa
Setting Realistic ROAS Targets in Practice
Rather than picking a single number, set a range for each campaign type based on its role in the funnel. Prospecting campaigns aimed at cold audiences will naturally have a lower ROAS than remarketing campaigns aimed at people who have already shown interest, and both are doing their job even though the numbers look different. Review targets at least quarterly, factoring in seasonal demand, new product margins, and any change in average order value, rather than leaving the same target in place indefinitely regardless of what's happening in the account.
Where to Go Next
A "good" ROAS depends on your margins, lifetime value, and business model. Ecommerce brands should target 3-5x. Service businesses with high lifetime value should target 8-15x. But ROAS alone doesn't tell the full story - always consider profit margins, attribution models, and the mix of new versus returning customers.
- PPC agency services — get help setting and hitting the right ROAS targets
- Google Ads management — improve Quality Score and lower CPCs
- Google Ads cost Australia guide
- Australian digital marketing statistics 2026
