What is break-even ROAS?
Break-even ROAS is the exact return at which your ads stop losing money — 1 divided by your gross margin.
Formula
Break-even ROAS = 1 ÷ Gross margin
This is the one advertising benchmark that's genuinely yours. It falls straight out of your own margin and owes nothing to what other businesses in your industry achieve.
At a 40% margin it's 2.5 — you need $2.50 back for every $1 spent just to stand still. At a 20% margin it's 5.0, which is demanding on cold traffic and usually means you need repeat purchases to make paid acquisition work at all.
Most advertisers who feel their ads 'aren't working' have never calculated this. They're comparing their results to benchmarks published by businesses with completely different economics, and drawing conclusions that don't apply to them.