"What is a good ROAS?" is one of the most common questions in performance marketing and one of the least useful ones. Not because the answer is secret, but because the question is incomplete. A ROAS number with no context tells you almost nothing about whether your paid acquisition is actually working.
Return on Ad Spend divides revenue attributed to ads by the cost of those ads. A 4x ROAS means you generated £4 in attributed revenue for every £1 spent. That sounds clean. The problem is that ROAS says nothing about profit. A business with 20% gross margins needs a very different ROAS to break even than one with 70% margins. Comparing ROAS benchmarks across industries or business models is almost meaningless.
ROAS also says nothing about attribution quality. A 6x ROAS on a retargeting campaign that is only reaching people who would have bought anyway is worse than a 2x ROAS on a prospecting campaign that is genuinely driving new demand. The number looks better but it is doing less work.
The useful question is not "what ROAS is good" but "what ROAS do I need to break even, and what ROAS do I need to hit my target margin." The formula is straightforward: minimum ROAS equals 1 divided by your gross margin percentage. If your gross margin is 50%, your break-even ROAS is 2x. If it is 25%, your break-even ROAS is 4x.
That is before accounting for other costs: agency fees, platform fees, creative production, overheads. Add those in and your actual break-even ROAS is higher. A business with 40% gross margins that is also paying a 10% agency fee on spend needs a ROAS closer to 3.5x to cover the full cost of acquisition, not 2.5x.
This is why "what is a good ROAS" cannot be answered without knowing your unit economics. A 3x ROAS is excellent for a high-margin SaaS product and catastrophic for a low-margin consumable.
If you need a rough benchmark: Google Search tends to produce higher reported ROAS than social channels because the traffic is further along in intent. You might see 4–8x on brand keywords and 2–4x on non-brand for an ecommerce business. Meta tends to be lower on reported ROAS but reaches earlier-funnel audiences, so direct comparison is misleading. LinkedIn is expensive and reported ROAS often looks poor, the metric only makes sense if you account for deal value and pipeline contribution.
These numbers are descriptive, not targets. They describe what accounts in those channels commonly report, not what you should aim for. Your target ROAS should be derived from your margin and acquisition economics, not from a benchmark comparison.
Blended ROAS, total revenue divided by total ad spend, across all channels, is a better signal for business health than any single campaign's ROAS. Individual campaigns have very different roles. Brand campaigns look great on ROAS. Prospecting campaigns look weak. Neither number tells you whether the overall acquisition model is working.
Watch your blended ROAS trend over time while holding channel mix roughly constant. If it is declining while you are scaling spend, you are likely hitting diminishing returns or degrading creative. If it is improving, you are finding efficiency as the algorithm learns or as you improve the funnel downstream.
For B2B SaaS with long sales cycles, ROAS is often the wrong KPI to put at the centre of your optimisation. Revenue from a paid campaign might land in your CRM six months after the click. Reported ROAS in the platform will not capture that. Optimising towards ROAS in those contexts pushes you towards fast-closing, low-value leads and away from the accounts that actually matter.
The better metric depends on your model: cost per qualified opportunity, cost per trial-to-paid conversion, blended CPA with a revenue weight that reflects average deal value. ROAS is a useful shorthand for ecommerce. For anything more complex, you need a metric that reflects your actual business outcomes.
If you want help defining the right performance metrics for your specific model, get in touch.