Target ROAS (Return on Ad Spend) is a bidding strategy used in platforms like Google Ads and Facebook Ads. You set a target return you want to achieve, and the platform optimizes bids to reach that goal. For example, a 4× Target ROAS means you want $4 in revenue for every $1 spent on ads.

What is a good Target ROAS?

A 'good' Target ROAS depends on your profit margins. Generally, 3-4× is considered average for e-commerce, while 5×+ is good. However, your break-even ROAS (based on profit margins) should be your minimum target. Use our Break-even ROAS Calculator to find yours.

How do I calculate required budget for a revenue goal?

Divide your revenue goal by your Target ROAS. For example, if you want $10,000 in revenue with a 4× ROAS, you need $10,000 ÷ 4 = $2,500 in ad spend.

What's the difference between ROAS and ROI?

ROAS measures revenue per ad dollar (Revenue ÷ Ad Spend). ROI measures profit as a percentage ((Profit ÷ Cost) × 100%). A 4× ROAS equals 300% ROI. ROAS is commonly used in advertising, while ROI is used in broader business contexts.

Should I set an aggressive Target ROAS?

Setting too aggressive a Target ROAS can limit your campaign reach, as the platform will only bid on high-probability conversions. Start with a moderate target based on your break-even ROAS, then optimize. It's often better to start conservative and scale.

Target ROAS (Return on Ad Spend) is a bidding strategy used in platforms like Google Ads and Facebook Ads. You set a target return you want to achieve, and the platform optimizes bids to reach that goal. For example, a 4× Target ROAS means you want $4 in revenue for every $1 spent on ads.

What is a good Target ROAS?

A 'good' Target ROAS depends on your profit margins. Generally, 3-4× is considered average for e-commerce, while 5×+ is good. However, your break-even ROAS (based on profit margins) should be your minimum target. Use our Break-even ROAS Calculator to find yours.

How do I calculate required budget for a revenue goal?

Divide your revenue goal by your Target ROAS. For example, if you want $10,000 in revenue with a 4× ROAS, you need $10,000 ÷ 4 = $2,500 in ad spend.

What's the difference between ROAS and ROI?

ROAS measures revenue per ad dollar (Revenue ÷ Ad Spend). ROI measures profit as a percentage ((Profit ÷ Cost) × 100%). A 4× ROAS equals 300% ROI. ROAS is commonly used in advertising, while ROI is used in broader business contexts.

Should I set an aggressive Target ROAS?

Setting too aggressive a Target ROAS can limit your campaign reach, as the platform will only bid on high-probability conversions. Start with a moderate target based on your break-even ROAS, then optimize. It's often better to start conservative and scale.

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Target ROAS Calculator

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Target ROAS Calculator

Target ROAS

Ad Spend / Budget

Results

Moderate

Expected Revenue

$4,000

Revenue you can expect if you achieve your Target ROAS

Estimated Profit

$3,000

ROI Equivalent

300%

Target ROAS

4×

3-5× ROAS — Balanced approach. Achievable for most e-commerce businesses with decent margins (30%+).

Target ROAS Formulas

Calculate Expected Revenue

Expected Revenue = Target ROAS × Ad Spend

If Target ROAS = 4× and Budget = $1,000, then Expected Revenue = $4,000

High-margin business (50%): $4,000 revenue → $2,000 gross profit → $1,000 net profit. Low-margin (20%): $4,000 revenue → $800 gross profit → -$200 loss.

Calculate Required Budget

Required Budget = Revenue Goal ÷ Target ROAS

If Revenue Goal = $10,000 and Target ROAS = 4×, then Required Budget = $2,500

Conservative (5× ROAS): Need $2,000 budget. Aggressive (2× ROAS): Need $5,000 budget for same revenue.

Target ROAS Benchmarks by Industry

Use these benchmarks to set realistic Target ROAS goals:

Industry	Conservative	Moderate	Aggressive
E-commerce Most Common	5×+	3-5×	2-3×
SaaS Top Performer	7×+	5-7×	3-5×
Lead Generation	6×+	4-6×	2-4×
Retail Competitive	4×+	2-4×	1.5-2×

These are general guidelines. Your actual achievable ROAS depends on profit margins, competition, and ad quality.

Frequently Asked Questions

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ROAS Calculator Break-even Calculator