What Is a Good ROAS for Facebook Ads? (And Why You're Probably Measuring Wrong)

# What Is a Good ROAS for Facebook Ads? (And Why You're Probably Measuring Wrong)

You've spent £500 on Facebook ads and made £1,500 in sales. That's a 3x return on ad spend — sounds brilliant, right?

Maybe. Maybe not.

The problem is that ROAS (Return on Ad Spend) gets quoted like it's the ultimate measure of success, when it's actually just one number that can hide a lot of truth. I've seen businesses celebrating a "good" ROAS while their actual bank account gets emptier. And I've seen others panicking about a "bad" ROAS that's actually keeping them profitable.

Let's fix this.

What ROAS Actually Means

ROAS is simple maths: Revenue ÷ Ad Spend = ROAS

If you spend £100 on ads and generate £300 in revenue, your ROAS is 3x (or 300%, depending on how you write it).

That's it. It's not complicated. But it's also not the whole story.

Why Everyone Quotes the Same Numbers (And Why They're Wrong for Your Business)

You'll hear marketing people say "aim for a 3x ROAS" or "anything over 2x is good." These numbers are based on industry averages, usually from larger e-commerce businesses where margins are relatively thin.

Here's the thing: your business isn't an e-commerce average. You probably have different overheads, different profit margins, and different business costs than the next company.

A plumber with £8,000 monthly overheads needs a different ROAS target than a freelance copywriter with £500 in costs. A local electrician working alone has completely different economics than a salon with three staff members.

The industry average isn't your target. Your *breakeven point* is what matters.

How to Calculate Your Actual Breakeven ROAS

This is the number that actually matters for your business. And it's easier to work out than you'd think.

Step 1: Work out your true profit margin

Not just the profit on each sale — the profit after *all* your business costs are covered.

Let's say you're a local service business (plumber, decorator, electrician):

• Average job: £800 revenue
• Materials, fuel, tax, insurance, van payments, equipment: £300 per job
• Staff wages (if applicable): included above
• Monthly overheads (rent, admin, phone, utilities): £2,000
• Average jobs per month: 15

Your profit per job isn't £500. It's:

• Total revenue: £12,000
• Total costs (including overheads): £7,500 (materials/fuel + £2,000 overheads)
• Total profit: £4,500
• Profit margin: 37.5%

Step 2: Calculate breakeven ROAS

This is the ROAS where the money you spend on ads is covered by the profit you make.

Breakeven ROAS = 1 ÷ (Profit margin as a decimal)

Using the example above:

• Breakeven ROAS = 1 ÷ 0.375 = 2.67x

This means: for every £1 you spend on ads, you need to generate at least £2.67 in revenue just to *break even* on that advertising spend.

Any ROAS above 2.67x in this example is genuinely profitable. Below it, and you're actually losing money.

Let's do another example. You're an online retailer selling jewellery:

• Average order value: £60
• Cost of goods sold: £15
• Other business costs (website, packaging, staff): £20 per order
• Monthly overheads: £1,500
• Average orders per month: 100

• Total revenue: £6,000
• Total costs: £3,500 (COGS + other costs + overheads)
• Total profit: £2,500
• Profit margin: 41.7%
• Breakeven ROAS = 1 ÷ 0.417 = 2.4x

Notice it's similar to the first example, even though the businesses are completely different. That's because they have similar profit margins.

Now imagine a high-margin business — a fitness coach selling online courses:

• Course price: £297
• Cost to deliver: £5 per student
• Business costs: £50 per course (payment processing, support, admin)
• Monthly overheads: £500
• Average sales per month: 20

• Total revenue: £5,940
• Total costs: £1,600
• Total profit: £4,340
• Profit margin: 73%
• Breakeven ROAS = 1 ÷ 0.73 = 1.37x

This business breaks even at 1.37x ROAS. A 3x ROAS would be extraordinary. A 2x ROAS would already be very healthy.

That 3x target that everyone quotes? It would be overkill. But a "bad" ROAS of 1.5x would be great for this business.

ROAS Versus Actual Profit

Here's where most small business owners get caught out:

High ROAS doesn't always mean high profit. Low ROAS doesn't always mean you're losing money.

Let me show you why with real numbers.

Scenario 1: High ROAS, low profit

You run a dropshipping store. You spend £200 on ads and make £1,000 in revenue (5x ROAS — amazing!). But:

• Product cost: £600
• Payment processing: £50
• Packaging and shipping: £100
• That £200 ad spend

You've made £50 profit. Your ROAS looks sensational. Your bank account is barely moving.

Scenario 2: Lower ROAS, solid profit

You're a local service business. You spend £500 on ads, generate £2,000 in revenue (4x ROAS). Your material and overhead costs are £900 total.

You've made £600 profit on £500 spend. Your ROAS is lower, but you've actually made more profit in real money.

The point: ROAS tells you how much money came in relative to what you spent. It doesn't tell you how much you actually kept.

What You Should Actually Be Tracking

1. Breakeven ROAS — the minimum you need to hit (calculate it using the method above)

2. Profitable ROAS — ideally 1.5x to 2x *above* your breakeven point. If your breakeven is 2.67x, aim for 4x to 5x. This gives you buffer for bad months, competition changes, and unexpected costs.

3. Actual profit in pounds — how much money you're actually making after all costs, not just what revenue came in

4. Cost Per Acquisition (CPA) — how much you're paying to get one customer. This is often more useful than ROAS for controlling your spend.

For example: if you know you break even at £150 CPA, you can set a daily budget that caps your spending at a point where you're still profitable, regardless of what ROAS looks like that week.

A Quick Reality Check

Before you panic about your current ads:

If your ROAS is above your breakeven point, the ads are working. They might not be brilliant, but they're paying for themselves.

If it's below your breakeven point, you need to either:

• Improve the ads (better targeting, better creative, better copy)
• Improve the offer (higher value product, better pricing)
• Improve the landing page (reduce friction, clearer next steps)
• Accept that Facebook ads aren't the right channel for your business right now

And if you're genuinely unsure what your profit margins are, or you've never calculated your breakeven ROAS, that's where you should start. Today. Before you spend another pound on ads.

That calculation (profit ÷ revenue) is the single most important number in your business. If you don't know it, you're flying blind — not just on Facebook ads, but on whether your business is actually working.

We help small businesses get this right at BrightClick, but honestly, you don't need an agency for this part. Spend an hour with your numbers. Get clear on what breakeven actually looks like for your business. Then you'll know whether your ROAS is good or not.

Your action today: Open a spreadsheet. Write down your total revenue for last month, your total costs (everything — materials, wages, overheads), and work out your actual profit margin. Then calculate your breakeven ROAS using the formula above. That's your real target. Not 3x. Not 2x. *Your* number.