Ad Spend ROI Guide: ROAS, CAC, and Profitability
Learn how to interpret ROAS and CAC so you scale only profitable campaigns.
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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