# ROAS: what it means, how to calculate it, and your break-even point

> Measure attributed value per ad dollar, account for returns in a worked example, and estimate a break-even ROAS from your margin.


**ROAS stands for return on ad spend.** It compares the value attributed to ads with the amount spent on them. The formula is:

**ROAS = conversion value attributed to ads ÷ ad spend**

If a campaign records CLP 300,000 in attributed value and spends CLP 100,000, its ROAS is 3×: the report assigns CLP 3 in value for each CLP 1 of media spend. Google Ads often displays this ratio as a percentage, or 300%. [Google Ads’ ROAS definition and format](https://support.google.com/google-ads/answer/12851704?hl=en) describe its own reporting; check what each platform includes in value and spend before comparing results.

ROAS does not by itself deduct product costs, fulfillment, transaction fees, or team labor. A 3× result therefore does not mean you made CLP 2 for every CLP 1 spent. For the full economic result of a campaign, see our [social media ROI guide](/en/guides/social-media-roi/).

## How to calculate break-even ROAS from your margin

Your break-even ROAS depends on how much of each revenue dollar remains after variable order costs. Use the same revenue basis for the attributed value and margin calculation:

**Contribution margin before ads = (net attributed revenue − variable order costs) ÷ net attributed revenue**

**Break-even ROAS to cover ad spend = 1 ÷ contribution margin before ads**

At a 40% margin, each CLP 1 in net revenue leaves CLP 0.40 to cover ads. The break-even point is 1 ÷ 0.40 = **2.5×**. That threshold covers ad spend under those assumptions; it excludes fixed overhead, taxes, and any costs left out of the calculation. If the margin is zero or negative, no finite positive ROAS covers ad spend in this model. If ad spend is zero, ROAS is undefined because the formula divides by zero.

### Example: returns, margin, and ad spend

A fictional shop records 10 ad-attributed orders with an initial value of CLP 800,000. It later confirms CLP 80,000 in refunds and cancellations, leaving CLP 720,000 in net attributed revenue. For this example, variable costs for those orders are CLP 432,000 and ad spend is CLP 200,000.

- Using the initial value, the ratio is CLP 800,000 ÷ CLP 200,000 = 4×.
- After subtracting returns from the revenue basis, it is CLP 720,000 ÷ CLP 200,000 = **3.6×**.
- Contribution before ads is CLP 720,000 − CLP 432,000 = CLP 288,000. That is a margin of CLP 288,000 ÷ CLP 720,000 = 40%.
- Break-even ROAS is 1 ÷ 0.40 = **2.5×**. After CLP 200,000 in ad spend, CLP 88,000 remains in contribution before fixed overhead and other excluded costs.

The example is fictional and uses the same net-revenue basis for ROAS and margin. Return handling depends on sales records and platform setup. Google Ads documents adjustments to retract a canceled or returned purchase or restate its value after a partial return; do not assume every channel makes that adjustment automatically. [Adjust conversions in Google Ads](https://support.google.com/google-ads/answer/7686447?hl=en).

## How to combine ROAS across campaigns

For a combined period, divide total attributed value by total spend. Do not average campaign ROAS values when each campaign spent a different amount.

Consider two fictional campaigns:

| Campaign | Attributed value ÷ ad spend | ROAS |
| --- | --- | --- |
| A | CLP 400,000 ÷ CLP 100,000 | 4× |
| B | CLP 300,000 ÷ CLP 200,000 | 1.5× |
| Total | CLP 700,000 ÷ CLP 300,000 | 2.33× |

The simple average of 4× and 1.5× is 2.75×, but it does not represent how much each campaign spent. The combined result is CLP 700,000 ÷ CLP 300,000 = 2.33×. Keep currency, dates, attributed-value type, and included spend consistent across the campaigns you combine.

## What to check before comparing reports

The numerator depends on which action counts as a conversion, what value you recorded, and how the report credits ads. In Google Ads, the count can be set to count one conversion or every conversion after an interaction; adjustment and attribution settings can also change the reported figure. [Google Ads’ conversion documentation](https://support.google.com/google-ads/answer/6270625?hl=en) describes those options for that platform.

Record the platform, campaign, period, currency, value basis, included spend, and attribution rule or window alongside ROAS. Check those fields before drawing a conclusion from two platforms’ figures. Attributed value assigns credit under a chosen measurement method; by itself, it does not show how many additional sales the ads caused.

Conversions can also arrive after a click. Google Ads notes that recent periods may look incomplete while conversions arrive within the configured window. Check your account’s conversion delay before closing a comparison; there is no universal waiting period. [Google Ads explains conversion delay](https://support.google.com/google-ads/answer/6239119?hl=en).

If ROAS rises, first check whether attributed value, spend, campaign mix, or the report window changed. Then compare margin and confirmed sales volume. A higher ratio can tell you where to investigate; it does not replace a full profitability calculation.

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