ROAS, blended ROAS and MER: which one to run the business on

Return on ad spend is the most quoted number in paid marketing and one of the most misread. The formula is simple. The trouble is the revenue on top of it: whose count, under which rule, and whether it already belongs to another channel.

The formulas

ROAS is usually written as a ratio (3.2) or a percentage (320 percent). Both mean $3.20 of revenue for each $1 of spend.

People use blended ROAS and MER loosely. Some count only ad spend in MER, some include agency fees, tools and influencer payments. Write down which costs you include, and keep it the same month to month.

A worked example

Example numbers, made up for illustration. A store spends $4,000 on Meta and $2,000 on Google in a month. The store records $21,000 in revenue.

• Meta reports $14,000 in purchase value: ROAS 3.5.
• Google reports $9,000 in conversion value: ROAS 4.5.
• Added together, the platforms claim $23,000, more than the store's whole $21,000, before counting a single email, organic or direct sale.

That is not an error in either platform. Each one credits every sale where its ad played a part inside its window, and many buyers touched both. See why analytics numbers never match.

Blended ROAS from the store's own number: $21,000 ÷ $6,000 = 3.5. It cannot double count, because each sale is counted once.

Break-even ROAS: the number that tells you if it pays

A ROAS of 3 sounds good. Whether it is depends on your margin.

Break-even ROAS = 1 ÷ gross margin. With a 40 percent gross margin, break-even ROAS is 1 ÷ 0.40 = 2.5. Below 2.5 the ads lose money on the first order; above it they make some. With a 70 percent margin, break-even is about 1.43.

Two adjustments make it more honest:

• Use contribution margin if shipping, payment fees and returns are large. They come out of every order.
• Count repeat purchases if customers come back. An ad that brings a buyer worth three orders over a year can run below first-order break-even and still pay. Use your real repeat rate, not a hoped-for one.

Which number to use for which decision

Platform ROAS is fine for comparing things inside that platform, because the bias is the same for every campaign there. It is the wrong number for comparing platforms or adding them up.

When ROAS misleads

• Brand search and retargeting look brilliant. They sit at the end of the path and collect credit for sales other channels started. Pause them for a week in one region and watch what happens to total revenue before trusting a ROAS of 12.
• Prospecting looks weak. It starts paths that end elsewhere. Read it in first-touch attribution too.
• Short reporting windows. Google Ads reports conversions on the click date, so a sale on day 20 lands back in the earlier week and recent days look weak until the late sales arrive (Google).
• Revenue without refunds. Use revenue after refunds and cancellations, or the platforms and the store will disagree for a reason that has nothing to do with attribution.
• Currencies. A ROAS that divides euros of revenue by dollars of spend is meaningless. Convert one side, or only compare numbers in the same currency.

Common questions

What is a good ROAS?

The one above your break-even ROAS, after returns and fees. A good ROAS for a 75 percent margin product would lose money on a 25 percent margin product.

Is MER the same as blended ROAS?

Often they are used to mean the same thing: total revenue divided by total spend. Some teams count only ad spend in blended ROAS and all marketing costs in MER. State which one you use.

Why is my blended ROAS lower than Meta's ROAS?

Meta's ROAS counts sales it shares with other channels, and includes view-through and engage-through purchases. Blended ROAS divides each sale once by all of your spend.

What is POAS?

Profit on ad spend: gross profit credited to ads divided by spend. It is ROAS with margin already applied, so 1.0 is break-even.

Sources

• Google Ads Help: Conversions by time. Checked October 2026.
• The formulas are standard definitions. The example numbers are made up for illustration.