Target ROAS Calculator
Break-even ROAS only tells you where you stop losing money. Target ROAS tells you the number you actually need to hit your desired profit margin on top of that.
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How target ROAS is calculated
Target ROAS is 1 ÷ (gross margin − desired profit margin). If a product has a 40% gross margin and you want a 15% profit margin left over after ad spend, you need a ROAS of 1 ÷ (40% − 15%) = 4x.
This is the number that actually reflects what you want out of the campaign, rather than just the point where it stops losing money — see the Break-Even ROAS calculator for that floor.
FAQ
What if my desired profit margin is higher than my gross margin?
That's not achievable through ad spend alone — the calculator will flag it. Your desired profit margin has to be lower than your gross margin, since ad spend has to fit inside the gap between the two.
Should every campaign use the same target ROAS?
No — margin varies by product, so a single account-wide target usually under-targets your high-margin products and over-targets (or makes unprofitable) your low-margin ones. Calculate target ROAS per product where you can.
How is this different from just picking a ROAS that 'feels' profitable?
A gut-feel ROAS target doesn't account for your actual margin. Two products with a 3x ROAS can have completely different real profit outcomes depending on their gross margin — this calculator ties the target directly to the number that matters.
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