Marketing · 5 min read
Calculating break-even ROAS for your products
How to know the minimum return your advertising must achieve before it makes money.
Return on ad spend (ROAS) is only meaningful when compared with the break-even point for the specific product being advertised.
The formula
Break-even ROAS = Net selling price ÷ Contribution margin per unit before advertising. If a product sells for RM100 and leaves RM25 after all variable costs, you need RM4 of sales for every RM1 of ads simply to break even.
Use it per product
Products with thin margins need far higher ROAS. A single account-level target hides which campaigns are quietly losing money.