Google Ads Break-even ROAS

Google Ads reports conversion value ROAS — not profit ROAS. Before you set target ROAS (tROAS) bidding on Search, Shopping, or Performance Max, calculate the minimum ROAS where your margin covers ad spend.

Step 1: Get your margin inputs

  • AOV — average order value from Google Ads or Shopify (conversion value ÷ conversions).
  • Gross margin % — revenue minus COGS, as a share of AOV. Use Shopify profit reports or your P&L, not ad platform data.
  • Fixed cost per order — shipping subsidies, payment fees, packaging (optional but recommended).

Step 2: Calculate break-even ROAS

Break-even ROAS = AOV ÷ [(AOV × margin%) − fixed cost per order]

Example: $90 AOV, 50% margin, $6 fixed costs → contribution $39 → break-even ROAS = 2.31×

Use the Break-even ROAS Calculator for instant results.

Step 3: Set target ROAS in Google Ads

  1. Open campaign → Settings → Bidding.
  2. Choose Maximize conversion value with a target ROAS, or portfolio tROAS if you manage multiple campaigns.
  3. Enter your break-even ROAS as the floor. For profit, set tROAS 10–25% above break-even (e.g. 2.31× floor → try 2.6×–2.9×).
  4. Allow 1–2 weeks of learning before judging performance — especially on Performance Max.

Shopify + Google Ads

Shopify merchants often use Google Ads conversion value with default purchase events. Confirm your pixel sends profit-aware value or adjust tROAS upward if conversion value is gross revenue. Pair break-even ROAS with max CPA and max CPC when testing new keywords or Shopping feeds.