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

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

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

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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