Let’s talk about something that trips up a lot of ecommerce brands when it comes to Google Ads strategy: ROAS targets.
Because I see this all the time…
Clients setting sky-high ROAS targets that look good on paper, but are actually leaving a tonne of profit on the table.
So today, I want to clear up some myths, talk about what really matters when it comes to ROAS, and show you how to figure out the right ROAS target for your business.
What Even Is a “Good” ROAS?
Let’s start with this question I was asked recently:
“My client wants 480% ROAS based on actual revenue and ad spend. That equates to about 300% tracked ROAS inside Google Ads. Is that high?”
Here’s the thing:
No, 300% tracked ROAS isn’t high. That’s actually fairly average for ecommerce in Google Ads.
But even asking whether it’s “high” or “low” misses the point.
Because here’s the truth:
We can give you any ROAS you want.
If you want 1000% ROAS, no problem. We’ll just slash your bids and sit back as your spend drops, clicks drop, sales drop… and the ROAS number goes sky high.
But is that a win?
You tell me.
The Real Question You Should Be Asking
The question isn’t:
“Can I hit ROAS X?”
The answer to that is almost always yes.
The real question is:
“What ROAS target is right for my business goals?”
For 99% of ecommerce stores, that goal is to maximise profit.
Not just get the prettiest number in a dashboard. Not just hit some arbitrary target. But make the most money.
So rather than asking whether 300% or 480% is too high or too low, we need to get more strategic.
First: Understand Your Break-Even ROAS
This is the starting point for any ROAS conversation.
Your break-even ROAS is simply:
1 divided by your gross profit margin (GPM%)
So let’s say your GPM is 40%. That gives us:
1 / 0.4 = 2.5
So, your break-even ROAS is 250%.
That means any ROAS target above 250% should technically be profitable.
But just because 300% is profitable doesn’t mean it’s optimal.
The Problem With Arbitrary ROAS Targets
A lot of ecommerce founders (or even media buyers) pick a ROAS target without knowing where it came from.
Sometimes it’s based on last year’s performance. Sometimes it’s copied from another brand. Sometimes it just feels right.
But if you’re serious about scaling profitably, we need to treat this like a proper test.
That means setting up experiments, tracking results, and analysing gross profit, not just ROAS.
What I Recommend: Test Multiple ROAS Targets
Here’s what I suggest to clients who are serious about growth:
1. Test a few different ROAS targets
Pick three targets: say 200%, 300%, and 400%. Make sure you run each one long enough to get meaningful data.
2. Track revenue and gross profit at each level
Build a table like this:
(Note: these are example numbers — yours will vary)
3. Pick the one that makes you the most gross profit
Forget about which one gives you the highest ROAS.
If 200% ROAS gives you more actual profit than 300% or 400%, that’s your winner.
This is how you scale.
Not by picking targets out of thin air.
Why You’re Probably Leaving Money on the Table
Let’s say your current ROAS target is 400%.
It’s super “efficient”. Your blended CAC is low. You feel like the account is humming.
But what if you could drop the ROAS target to 250% and spend 3x as much profitably?
What if you’re stuck at $2,000/day in spend but could be at $6,000/day with the same or even better gross profit?
High ROAS isn’t always a good thing.
Sometimes it’s just a sign that you’re playing it too safe.
Next Steps for You
If you’ve never tested multiple ROAS targets before, do it now.
Here’s a quick checklist:
Ask your finance person for gross profit margin (GPM).
Calculate your break-even ROAS (1 / GPM).
Pick 2–3 ROAS targets to test (above break-even).
Track spend, revenue, and gross profit at each target.
Pick the one that gives you the most gross profit.
Then keep iterating as needed.
ROAS is just a number — profit is what you take to the bank.
Conclusion
When ecommerce brands chase high ROAS numbers without understanding their margins, they risk trading short-term efficiency for long-term growth.
The right way to approach ROAS is:
Start with your gross profit margin.
Calculate your break-even ROAS.
Test multiple targets above break-even.
Choose the one that delivers the most gross profit.
If your goal is growth and sustainable profitability, ROAS is not a vanity number — it’s a variable in a larger experiment.
Set targets strategically, test thoroughly, and scale wisely.