Target ROAS Calculator
Find the minimum ROAS needed to hit a target net profit margin after ad spend, given your gross margin before ads. Complements break-even ROAS when you want a profit margin, not just zero profit.
Enter Values
Share of revenue left after variable costs and selling fees, before ads
Profit share of revenue you want after paying for ads
Result
Enter values above and click Calculate to see your result.
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Formula
How it works: Gross margin is your profit share of revenue before ads (after COGS and fees tied to the sale). If you want a net margin after ads, ad spend must be a smaller slice of revenue. The formula solves for the ROAS that makes that true.
Worked Example
Planning ROAS Around a Profit Target
Return on ad spend compares revenue to ad spend. When you already know your gross margin before ads, you can solve for the ROAS that leaves your desired net margin after ads. This is stricter than break-even ROAS because it builds in profit you want to keep.\n\nUse it when setting account-level targets or evaluating a new product. Pair it with the break-even ROAS calculator when you want both the floor and a stretch goal.
- Gross margin must be measured before ad spend.
- Target net margin is the profit after ads as a share of revenue.
- If targets are inconsistent, fix pricing or costs before scaling spend.
Treat the result as a planning number; real campaigns need ongoing measurement.
You can also calculate changes using our ROAS Break-Even Calculator, E-commerce Profit Calculator, Amazon FBA Profit Calculator or LTV:CAC Ratio Calculator.
Frequently Asked Questions
How is this different from break-even ROAS?
Break-even ROAS is where profit after ads is zero. This tool sets a positive net margin target so you can plan campaigns above the bare minimum.
How do I get gross margin before ads?
Start from selling price minus product cost, shipping, and marketplace fees as a percent of price. Exclude ad spend from that margin.
Why does the calculator say to raise margin?
If your target net margin is higher than or equal to gross margin, no ROAS can satisfy both. You need lower costs, higher price, or a lower net target.
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I can help you understand the target roas calculator formula, interpret your results, and answer follow-up questions.
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