Short answer: There is no reliable universal "good ROAS" table, and any article that hands you one by industry is asking you to trust a stranger's margins instead of your own. A good ROAS is the return on ad spend that clears your break-even point (based on your gross margin) and then some, once you account for other costs of doing business. The only way to know your number is to calculate it from your own contribution margin, not to copy a benchmark built from a mix of businesses you've never seen.
Why published ROAS benchmarks mislead
Industry benchmark tables travel well because they look authoritative and give you a single number to aim for. The problem is that ROAS is a ratio of revenue to ad spend, and revenue tells you nothing about profit unless you know the cost of goods, delivery, returns, payment fees, and everything else sitting between a sale and the cash you actually keep. Two businesses in the same "industry" category can have wildly different margins, order values, and repeat purchase rates, so a benchmark that averages them together is not describing either one. It is describing an industry that doesn't exist.
There is also a reporting problem. Benchmark tables rarely disclose whether the underlying ROAS figures are platform-reported (what Google Ads or Meta Ads Manager shows you) or blended (all revenue divided by all ad spend, including sales the platform didn't directly influence). Mixing those two measurement methods into one "industry average" produces a number that cannot be reproduced or defended, which is exactly why we won't publish one here.
Start with break-even ROAS, not a target ROAS
Before you can decide whether a ROAS is "good", work out the ROAS at which an ad campaign stops losing you money. That's your break-even ROAS, and it comes directly from your gross margin.
The formula is simple: break-even ROAS = 1 ÷ gross margin (expressed as a decimal). Gross margin here means revenue minus the cost of goods or service delivery, divided by revenue.
Worked example with placeholder numbers: say your gross margin is 40% (0.4). Break-even ROAS = 1 ÷ 0.4 = 2.5x. At a ROAS of 2.5x, every dollar of ad spend is matched by $2.50 of revenue, and once you subtract the $1.50 in cost of goods sold from that $2.50, you're left with exactly $1.00 — the dollar you spent on the ad. Anything above 2.5x in this example is genuinely profitable from a contribution-margin standpoint; anything below it is losing money on paid media, no matter how impressive the ROAS number looks in a screenshot.
Now try a business with a 70% gross margin (0.7): break-even ROAS = 1 ÷ 0.7 ≈ 1.43x. A "low" ROAS of 2x might be very profitable here, while the same 2x could be a loss-maker for the 40%-margin business above. This is precisely why a single benchmark number can't apply across industries, or even across two businesses in the same industry with different cost structures.
Contribution margin: the layer most ROAS conversations skip
Gross margin gets you to break-even on the cost of the product or service itself, but it usually ignores variable costs that scale with each sale: payment processing fees, shipping, fulfilment labour, returns and refunds, and any commission paid to a marketplace or affiliate. Contribution margin subtracts all of these variable costs from revenue, not just cost of goods, which gives you a more honest break-even ROAS.
Worked example: suppose your product sells for $X, cost of goods is 35% of $X, payment processing is 2% of $X, and shipping and returns average 8% of $X. Total variable cost is 45% of $X, so contribution margin is 55% (0.55). Break-even ROAS = 1 ÷ 0.55 ≈ 1.82x. If you had only used gross margin (say cost of goods alone was 35%, implying a 65% margin), you would have calculated a break-even ROAS of about 1.54x — understating what you actually need to hit before the campaign is profitable. That gap between gross-margin break-even and contribution-margin break-even is where a lot of "profitable-looking" campaigns quietly bleed cash.
Bring lifetime value into the target, not just the first sale
If customers only ever buy once, your target ROAS should sit comfortably above your contribution-margin break-even point on that single transaction, because there's no second chance to recover an unprofitable acquisition cost. If customers typically make repeat purchases or renew a service, you can rationally accept a lower ROAS (even below break-even) on the first transaction, provided the lifetime value of the relationship covers it.
Worked example: if your average first-purchase contribution margin is $Y and your typical customer buys again twice more over a year at the same margin, your effective lifetime contribution is roughly 3 × $Y (a simplified illustration, ignoring discounting and churn timing). A campaign that only just breaks even on the first sale could still be very profitable once repeat purchases are counted — but only if you can be reasonably confident those repeat purchases will actually happen, and only if you have the cash flow to fund acquisition now while waiting for the value to arrive later.
Blended ROAS vs platform-reported ROAS
Platform-reported ROAS is the number inside Google Ads or Meta Ads Manager, calculated from the conversions each platform claims credit for. It's useful for day-to-day optimisation but tends to overstate impact, because multiple platforms often claim credit for the same sale, and attribution models vary between them.
Blended ROAS takes total revenue across the business for a period and divides it by total ad spend across all channels for the same period. It's a blunter number, but it can't double-count, and it's the number that ties back to your actual bank account. If your platform-reported ROAS looks strong but your blended ROAS is flat or falling over time, that's a signal that paid media may be taking credit for sales that would have happened anyway (branded search, direct visits, repeat customers), rather than generating genuinely new demand.
A sensible approach is to track both: use platform-reported ROAS to manage bids and creative within a channel, and use blended ROAS, checked monthly against revenue and marketing spend from your accounting system, as the number that decides whether your overall paid media investment is working.
Attribution windows change the number without changing reality
An attribution window is the period after an ad click (or view) during which a resulting sale is credited to that ad. Extending a platform's attribution window from, say, a 1-day click window to a 7-day click-and-view window will typically increase the ROAS the platform reports, because more sales fall inside the counting period — without a single extra dollar of revenue actually being generated by the ads. Before comparing ROAS figures over time, or between platforms, check that the attribution window hasn't quietly changed, because a "ROAS improvement" that comes purely from a longer counting window isn't a real improvement in performance.
This also matters when a provider reports a ROAS figure to you. Ask what attribution window and model produced it (last-click, data-driven, view-through inclusion), and ask for the same figure recalculated on a consistent, more conservative basis so you can compare it fairly against your own break-even calculation.
How to set your own ROAS target
- Calculate your contribution margin (revenue minus all variable costs tied to a sale, not just cost of goods).
- Convert that into a break-even ROAS using 1 ÷ contribution margin.
- Decide how much profit above break-even you need to justify the risk and cash-flow impact of paid media, and add that as a buffer.
- Adjust the target down (with caution) if you have solid, historical evidence of repeat purchase value, and up if your model relies on one-off transactions.
- Track blended ROAS against your accounting figures every month, not just the platform dashboard, so the target stays anchored to real revenue.
Questions to ask a paid media provider about ROAS reporting
- Is the ROAS you're reporting platform-reported or blended against total business revenue?
- What attribution window and model are you using, and has it changed recently?
- Can you show blended ROAS trended over time alongside platform-reported ROAS, so I can see if the gap is widening?
- How are you accounting for repeat purchases or renewals when judging whether a campaign is working?
- What contribution margin assumptions are you using to recommend a target ROAS, and where did they come from — my numbers or an industry average?
Where to go next
Getting ROAS targets right depends on clean measurement and a media mix that matches your margins and sales cycle. If you want help setting these up properly, our team can walk through your numbers rather than hand you a generic benchmark.
