Find your target ROAS and CPA to run profitable ad campaigns.
ROAS (Return on Ad Spend) is a marketing metric that measures how much revenue your business earns for every dollar spent on advertising. For example, a ROAS of 3.0 means that for every $1 you spend on Facebook Ads, you generate $3 in sales.
Many beginners think any ROAS above 1.0 is profitable. This is false. A ROAS of 1.0 just means you made your ad money back—it doesn't account for the fact that you still have to pay for the actual product, shipping, and credit card fees.
Your Break-Even ROAS tells you the exact number your ad dashboard needs to hit just to pay for all your costs so you don't lose money. If your Break-Even ROAS is 2.5, a campaign running at 2.0 is actually draining your bank account.
CPA (Cost Per Acquisition) is exactly how much money you spend on ads to acquire one customer. Your Break-Even CPA is the maximum amount you can pay Mark Zuckerberg or Google to get a sale before the sale becomes unprofitable. It is essentially your gross profit per item.