What Is a Good ROAS? Benchmarks and How to Calculate It
Published July 5, 2026
What Is ROAS?
ROAS stands for Return on Ad Spend. It measures the revenue generated for every dollar spent on advertising. For example, a ROAS of 4:1 means you earn $4 for every $1 spent. ROAS is a key metric for evaluating the effectiveness of your ad campaigns, especially on platforms like Google Ads, Meta Ads, and Amazon.
How to Calculate ROAS: The Formula
The basic formula is:
ROAS = (Revenue from Ads) / (Cost of Ads)
You can express ROAS as a ratio (e.g., 4:1) or a percentage (e.g., 400%). To calculate ROAS in Google Ads, divide the "Conversion Value" by "Cost." In Excel, use a formula like =SUM(revenue)/SUM(cost).
How to Calculate ROAS Break-Even
Break-even ROAS is the minimum ROAS needed to cover your costs. It depends on your profit margin. For example, if your product has a 50% margin, you need a ROAS of at least 2:1 to break even (because you keep 50% of revenue). The formula is:
Break-Even ROAS = 1 / Profit Margin
Where profit margin is expressed as a decimal (e.g., 0.5 for 50%). If your margin is 25%, break-even ROAS = 1 / 0.25 = 4:1.
What Is a Good ROAS? Industry Benchmarks
According to WordStream's 2026 Google Ads Benchmarks, average ROAS varies widely by industry. Since ROAS depends on conversion rate and average order value, we can estimate it from the data. For example, if the average CPC is $4.44 and the average conversion rate is 4.5% in Apparel, the cost per acquisition (CPA) is $97.51. If the average order value is, say, $100, then ROAS is roughly 1.03:1. However, ROAS is not directly provided in the benchmarks, so we can infer that a "good" ROAS is one that exceeds your break-even point.
Here are some key CPC and conversion rate benchmarks from WordStream 2026:
- Apparel / Fashion & Jewelry: Avg. CPC $4.44, CVR 4.5%, CPL $97.51
- Attorneys & Legal Services: Avg. CPC $9.87, CVR 5.55%, CPL $131.63
- Automotive — For Sale: Avg. CPC $2.27, CVR 6.01%, CPL $44.26
- Beauty & Personal Care: Avg. CPC $4.62, CVR 10.35%, CPL $39.25
- Business Services: Avg. CPC $5.87, CVR 4.85%, CPL $93.69
- Dentists & Dental Services: Avg. CPC $8.00, CVR 10.67%, CPL $72.97
- E-Commerce: Avg. CPC $2.99, CVR 3.18%, CPL $91.52
- Finance & Insurance: Avg. CPC $3.39, CVR 2.64%, CPL $74.44
- Health & Fitness: Avg. CPC $6.17, CVR 6.94%, CPL $67.36
- Home & Home Improvement: Avg. CPC $8.33, CVR 8.05%, CPL $90.92
- Real Estate: Avg. CPC $3.43, CVR 5.47%, CPL $52.95
- Technology: Avg. CPC $5.67, CVR 3.97%, CPL $117.45
- Travel & Hospitality: Avg. CPC $2.24, CVR 4.87%, CPL $42.44
A good ROAS is typically 4:1 or higher for most businesses, but it depends on your margins. For low-margin industries like e-commerce, a ROAS of 3:1 might be acceptable, while high-margin industries like legal services may need a lower ROAS to be profitable.
How Much ROAS Is Good on Amazon?
On Amazon, ROAS is often called "ACoS" (Advertising Cost of Sale). A good ACoS is typically 15-30%, which translates to a ROAS of 3.3:1 to 6.7:1. However, this varies by product category and margin. Without specific Amazon benchmarks in the data, focus on your break-even ROAS.
How to Calculate Target ROAS
Target ROAS is a bidding strategy in Google Ads where you set the desired return. To calculate it, use:
Target ROAS = (Revenue per Conversion) / (Cost per Conversion)
For example, if your average order value is $50 and you want to spend $10 per conversion, your target ROAS is 5:1 (500%).
How to Improve ROAS
- Increase conversion rate: Optimize landing pages, ad copy, and targeting.
- Reduce CPC: Use negative keywords, improve Quality Score, and test lower bids.
- Increase average order value: Upsell or cross-sell.
- Focus on high-margin products.
Frequently Asked Questions
What does ROAS mean?
ROAS stands for Return on Ad Spend. It measures the revenue generated per dollar spent on advertising.
How much is good ROAS?
A good ROAS is typically 4:1 or higher, but it depends on your profit margin. Use break-even ROAS as your baseline.
How to calculate ROAS in digital marketing?
Divide total revenue from ads by total ad spend. For example, if you spent $1,000 and earned $4,000, your ROAS is 4:1.
How to calculate ROAS break-even?
Break-even ROAS = 1 / Profit Margin. If your margin is 25%, break-even ROAS is 4:1.
Is ROAS the same as ROI?
No. ROAS focuses on ad spend only, while ROI considers total costs (including product, overhead, etc.). ROAS is a subset of ROI.
How to calculate ROAS in Google Ads?
In Google Ads, go to the Campaigns tab, add columns for "Conv. value" and "Cost," then divide value by cost. Or use the formula in a custom column.