Calculation for ROAS goals based on profit margins.
I often get into a situation where I need to make changes that could reduce the projected ROAS of a campaign in order to keep up with impressions and get more conversions. Ex: CPC needs to go up due to increased competition. As long as the ROAS goal is in line with the profit margin, it is nothing to fear! I apply an easy calculation based on the product profit margin to generate a minimum ROAS threshold for profitability. As long as you stay above this, it is profitable for the client. Use this calculation to find the minimum ROAS threshold:
If the profit margin is 40%: 1/0.40*100=250% ROAS Goal.
So as long as your ROAS at the end of the month is above 250% you are profitable 🙂

Read A Full Article About Using Profit Margins to Establish ROAS Goals HERE