A good ROAS (Return on Ad Spend) for Google Ads is generally 4:1 or higher — meaning $4 in revenue for every $1 spent on ads. The right target varies by industry and margin. High-margin service businesses (HVAC, legal, dental) can operate profitably at 3:1. E-commerce businesses with thin margins may need 8:1 or higher to cover COGS and overhead.
| Industry | Typical ROAS | Minimum for Profitability |
|---|---|---|
| HVAC / Home Services | 5:1 – 12:1 | 3:1 |
| Dental / Medical | 4:1 – 8:1 | 3:1 |
| Legal Services | 3:1 – 6:1 | 2.5:1 |
| E-commerce (general) | 4:1 – 6:1 | 5:1 |
| E-commerce (luxury) | 3:1 – 5:1 | 2.5:1 |
| Restaurants | 2:1 – 5:1 | 3:1 |
| Real Estate | 3:1 – 7:1 | 2:1 |
Your break-even ROAS = 1 ÷ gross margin. If your gross margin is 30%, you need at least 3.3:1 ROAS to cover cost of goods. Add overhead and profit target, and your target ROAS climbs. A 50% gross margin business needs 2:1 to break even on product costs — but needs 4–5:1 to actually profit after operations and management fees.
For service businesses that don't track exact job revenue in Google Ads, ROAS is hard to calculate accurately. Cost per lead (CPL) or cost per acquisition (CPA) is more actionable. Know your average job value and close rate. If average job = $1,200 and you close 40% of leads, your maximum CPL is $480 to break even at 1:1 — meaning you want CPL well below that to generate profit.
400% ROAS means a 4:1 return — $4 in revenue for every $1 spent on ads. Google Ads often reports ROAS as a percentage rather than a ratio: 400% = 4x = 4:1. These are the same number expressed differently. When setting Target ROAS bid strategies in Google Ads, enter the percentage (e.g., 400 for a 4:1 target).
Below your break-even ROAS (typically under 2:1 for most businesses) indicates the campaign is losing money. However, don't kill campaigns in the first 30–60 days based on ROAS alone — the Google algorithm is still learning. A 1.5:1 ROAS in month 1 that trends toward 4:1 in month 3 is a normal optimization curve. Evaluate at 90 days with sufficient conversion volume.
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