Target ROAS Calculator for Bidding Strategies

Target ROAS is the minimum return on ad spend needed to meet your profit goals. The formula is: Target ROAS = 1 / Maximum Acceptable CPA × Average Order Value, or more simply: Target ROAS = 1 / Profit Margin %. For example, if your profit margin is 25%, your target ROAS should be at least 4.0x (1 / 0.25) to break even. To actually earn profit, set it higher — e.g., 5x–6x. This target is then used in automated bidding platforms (Google Ads, Meta) to optimize bids toward conversions that meet your return threshold.

In Google Ads, Target ROAS is a Smart Bidding strategy where Google sets bids to achieve your desired return. Enter your target as a percentage — for instance, 400% means $4 revenue per $1 spent. Google recommends at least 15 conversions in the last 30 days for the algorithm to optimize effectively. Monitor and adjust your target based on actual performance data.