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ROAS calculator & break-even ROAS
ROAS is revenue divided by ad spend. Break-even ROAS is 1 divided by the margin you keep after product costs and fees. At a 50% margin you need 2x just to stand still. Enter your numbers to see your ROAS, break-even ROAS, maximum CPA, MER and profit in AED.
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Your numbers
Your results
Return on ad spend (ROAS)
4.55x
AED 91,000 revenue from AED 20,000 spend
Above break-even by 2.32x. Each AED 1 of ad spend returns about AED 1.04 in profit after costs.
- Break-even ROAS
- 2.23x
- 1 ÷ contribution margin
- Max CPA
- AED 157
- Most you can pay per order
- Monthly profit after ads
- AED 20,820
- After product costs, fees and ad spend
- Current CPA
- AED 77
- 260 orders
- MER (blended)
- 6.00x
- Total revenue ÷ total marketing
- Contribution margin
- 44.9%
- Kept from each AED 1 of revenue
How this is calculated
- ROAS
Attributed revenue ÷ Ad spendWith your numbers: AED 91,000 ÷ AED 20,000 = 4.55x- Contribution margin
Gross margin % − Fees % − (Fulfilment per order ÷ AOV)With your numbers: 55% − 3% − 7.1% = 44.9%- Break-even ROAS
1 ÷ Contribution marginWith your numbers: 1 ÷ 44.9% = 2.23x- Max CPA
AOV × Contribution marginWith your numbers: AED 350 × 44.9% = AED 157- Current CPA
Ad spend ÷ Orders (Revenue ÷ AOV)With your numbers: AED 20,000 ÷ 260 orders = AED 77- Profit after ads
Revenue × Contribution margin − Ad spend − Other marketing costsWith your numbers: AED 20,820- MER
Total revenue (all channels) ÷ (Ad spend + Other marketing costs)With your numbers: AED 120,000 ÷ AED 20,000 = 6.00x
All figures are monthly and exclude VAT. ROAS here uses the revenue you enter; if that is platform-reported, treat it as an upper bound.
What is ROAS?
ROAS (return on ad spend) is the revenue your ads bring in for every dirham you spend on them. If you spend AED 10,000 on Meta and it drives AED 40,000 in sales, your ROAS is 4x, sometimes written 400% or 4:1. See the ROAS glossary entry for the short version.
ROAS measures revenue, not profit. A 4x ROAS is excellent for a brand with 70% margins and a loss for one with 20% margins. That is why the number you really need is your break-even ROAS.
How do you calculate break-even ROAS?
Break-even ROAS is the ROAS at which ad-driven sales exactly cover product costs, fees and the ad spend itself. Below it you lose money on every order. Above it, every extra dirham of ROAS is profit.
Break-even ROAS = 1 ÷ contribution margin %Contribution margin is what you keep from each AED 1 of revenue after cost of goods, payment or marketplace fees, and per-order costs like shipping and packaging. Use your real margin after these costs, not the headline gross margin, or you will set targets that quietly lose money.
| Input or step | Value |
|---|---|
| Average order value (AOV) | AED 350 |
| Gross margin | 55% |
| Payment fees | 3% of revenue |
| Shipping and packaging | AED 25 per order (7.1% of AOV) |
| Contribution margin | 55% − 3% − 7.14% = 44.86% |
| Break-even ROAS | 1 ÷ 0.4486 = 2.23x |
| Max CPA | AED 350 × 44.86% = AED 157 |
| Ad spend / attributed revenue | AED 20,000 / AED 91,000 |
| ROAS | 91,000 ÷ 20,000 = 4.55x |
| Profit after ad spend | AED 91,000 × 44.86% − AED 20,000 = AED 20,820 |
In this example the brand is well above break-even: each AED 1 of ad spend returns about AED 1.04 in profit after costs. If the same brand ran a 20% off sale, contribution margin would fall to about 32% and break-even ROAS would jump to roughly 3.1x.
What is a good ROAS?
There is no universal good ROAS. A good ROAS is one comfortably above your break-even, with enough headroom to cover the costs ROAS ignores: salaries, rent, agency fees and software. As a rule of thumb, aim for a target at least 1.3–1.5x your break-even ROAS on prospecting campaigns.
- High-margin products (skincare, supplements, digital) can scale profitably at 2–3x.
- Low-margin products (electronics, groceries, resale) often need 6–10x or more.
- Lead-gen businesses should use cost per lead and cost per qualified lead instead. ROAS only works once sales are tracked back to ads in your CRM.
Why doesn’t platform ROAS match your bank account?
Ad platforms grade their own homework. Meta, Google, TikTok and Snapchat each count a sale if their ad was clicked or viewed within their attribution window. When a customer sees an Instagram ad, clicks a Google ad and then buys, both platforms can claim the same AED 500 order.
- Double counting: add up platform-reported revenue and it often exceeds your actual sales.
- View-through credit: a 1-day view window credits ads people scrolled past, not ads that caused the sale.
- Tracking gaps: iOS privacy changes, ad blockers and missing Conversions API setups under-report sales on some platforms.
- Returns and cancellations: platforms record the purchase, not the refund. Cash-on-delivery refusals are common in the UAE and KSA.
Common mistake
Setting your break-even from gross margin and judging it with platform-reported ROAS. Both flatter the result. Use contribution margin, and check platform ROAS against blended numbers from Shopify or your finance system every month.
When should you use MER or CAC instead of ROAS?
MER (marketing efficiency ratio) is total revenue divided by total marketing spend, across every channel. It cannot be gamed by attribution, which makes it the best top-line health check once you run more than one channel.
- Use ROAS to compare campaigns, ad sets and creatives inside one platform.
- Use MER to judge whether marketing as a whole is paying off, and to set monthly budgets.
- Use CAC when customers buy more than once. Compare it to lifetime value (LTV), not first-order revenue. A subscription brand can happily run below break-even ROAS on the first order if repeat purchases pay it back.
We set up this kind of measurement (blended MER, server-side tracking and contribution-margin targets) as part of our performance marketing service. New to the terms? Our marketing glossary covers ROAS, MER, CAC and CPA in plain English.
FAQ
ROAS questions, answered
Divide the revenue from your ads by what you spent on them. AED 60,000 in revenue from AED 15,000 of ad spend is a ROAS of 4x (or 400%). Use revenue after discounts and, ideally, after returns.
Break-even ROAS = 1 ÷ contribution margin. Contribution margin is your gross margin minus payment fees and per-order costs such as shipping, as a percentage of revenue. With a 40% contribution margin, break-even ROAS is 1 ÷ 0.40 = 2.5x.
A good ROAS is one comfortably above your own break-even ROAS, not a market average. Many UAE e-commerce brands with 40–60% contribution margins need 2–2.5x to break even and target 3–4x to cover overheads. Low-margin categories need much more.
ROAS is revenue attributed to ads divided by ad spend, usually per platform or campaign. MER is total business revenue divided by total marketing spend across all channels. ROAS helps you optimise inside a platform; MER tells you whether marketing as a whole is working.
Max CPA is the most you can pay to acquire one order without losing money: average order value × contribution margin. It is the same break-even point expressed per order. With an AOV of AED 350 and a 45% contribution margin, max CPA is about AED 157.
Next step
Not sure your ROAS numbers are real?
Book a free 30-minute intro call to talk through your numbers. If you need a deeper check, our Growth & Tracking Audit reviews tracking, attribution and margins, then sets ROAS and MER targets your finance team will sign off.