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6 min read
Updated 2026-03-01

Ad Spend ROI Guide: ROAS, CAC, and Profitability

Learn how to interpret ROAS and CAC so you scale only profitable campaigns.

Quick start

Best for

Sellers optimizing ad ROI

Time needed

6 min read

Inputs you’ll need

  • Ad spend
  • Ad revenue
  • Gross margin %

Quick checklist

  • ROAS vs profitability
  • CAC benchmarks
  • Break-even ROAS

ROAS is not profit

ROAS tells you revenue per ad rupee, not profit per ad rupee.

Always compare ROAS to your break-even ROAS to avoid scaling loss-making ads.

CAC helps you see per-order cost

CAC = ad spend ÷ orders. Track it weekly to spot efficiency drops.

If CAC rises while margin stays flat, you need to adjust bids or pricing.

Use break-even ROAS

Break-even ROAS equals 1 / margin %. Example: 25% margin → 4x ROAS.

Campaigns below break-even should be optimized or paused.

Next step

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