What does "Proven ROAS" mean?

A campaign that has proven ROAS means that it’s ROAS is or was at whatever number you need it to be at in order to make a profit.

For example, a 100% ROAS means you spend $1 on ads and get $1 back.

This is never a large enough number because the business will undoubtedly have other expenses beyond just ad spend, so this campaign has not proven it’s ROAS.

400% ROAS is a general rule of thumb for the minimum number you should be aiming for if the business doesn’t know it’s exact costs & you therefore can’t calculate an exact ROAS metric.

This is because 400% lets you break even if the business has a 25% profit margin. You get to make at least 4x your money back to break even. If you want to cover an agency fee, then they’ll have to get to 450% ish.

Find current ROAS: All conversion value / cost

Find minimum, break-even ROAS: If 60% profit margin, figure out how many times 60% goes into 100% (60/100 = 1.7). Then, add two zeros to turn that into a percent and you get 160% break-even ROAS.

***Pro tip: If you are an e-commerce company, set up a custom column in Google Ads to display ROAS in a % format (fyi, if you don’t set this column up, you can look at “conversion value/cost” column which gives you the same ROAS number but in decimal format).

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