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The Target ROAS Calculator.
Four cost numbers plus the margin you want to keep - out comes the one number to hand your agency or media buyer: the blended ROAS target that actually delivers your margin goal, with breakeven printed next to it as the floor. Then the part most calculators skip: how to scope the target so the number can't be gamed.
Built by HoloGrowth - 50+ DTC brands, $50M+ partner revenue. No email, no gate - the math runs entirely on this page.
Your margin goal in, your target ROAS out.
Pull the inputs from your store backend and P&L, not from memory - a flattered COGS number produces a target you will hit on paper and miss on the bank statement.
Total revenue divided by total orders, last 90 days, after discounts
Landed product cost: manufacturing plus inbound freight, duties, and packaging - as a % of order value
Outbound shipping, 3PL pick-and-pack, packing materials - per order, in dollars
Card and platform payment fees - the processor's cut of each order
What you want left after variable costs AND ad spend, as % of revenue - this is CM3 on our Scaling Scorecard; 15%+ is the green zone. Enter 0 and the target collapses to plain breakeven
A target is only enforceable if the ROAS reported against it is real - and platform dashboards grade their own homework. The Agency Incentive Problem explains why. The floor under this target - breakeven, including the fixed-cost tier - lives in the Breakeven ROAS Calculator. More free tools: the Honest ROAS Calculator and the full tools library.
How target ROAS actually works.
Target ROAS = 100 ÷ (contribution margin % - target net margin %)
Every order splits three ways: variable costs, ad spend, and what you keep. Contribution margin before ads is the slice left after variable costs - and it is a hard ceiling, because ad spend and profit both have to come out of it. Decide how many points of margin you want to keep, subtract them from the ceiling, and what remains is the share of revenue ads are allowed to consume. Divide that share into 100 and you have the ROAS that delivers your margin.
Worked example: $80 AOV, 35% COGS ($28), $8 shipping and fulfillment, 3% payment fees ($2.40). Variable costs: $38.40. Contribution per order: $41.60 - a 52% contribution margin. Want 15% net after ads? Ads may consume 52 - 15 = 37% of revenue, so the target is 100 ÷ 37 = 2.7x.
At 2.7x blended, this brand keeps 15 cents of every revenue dollar after product costs and ad spend. Below it, the margin goal slips; at breakeven ($80 ÷ $41.60 = 1.92x), the ads pay for themselves and nothing else. That floor - and the higher first-tier version of it that carries your fixed costs - belongs to the Breakeven ROAS Calculator; this page exists to set the number above it.
How to hand your agency this target (so the number can't be gamed).
A target ROAS is a contract between you and whoever runs your ads - in-house, freelancer, or agency. Handed over as a bare number, it gets hit in the dashboard and missed in the bank account. Handed over with scope, it can't be. Four rules.
Scope it to new customers
An unscoped target invites the easy revenue: branded search from people already coming to buy, and repeat orders from customers you acquired last year. Both count toward dashboard ROAS without growing the business. State it in writing: the target applies to new-customer revenue. The two-tier ROAS framework shows how to split the measurement.
Grade it on blended numbers, not platform numbers
Platform ROAS is each platform's opinion of its own contribution. In the accounts we've audited, Google typically overstates its contribution by 80-90% and Meta typically understates by 20-80% - so a target graded inside Ads Manager measures attribution settings, not performance. The reporting number is blended: ad-driven revenue from your backend, divided by total spend.
Keep your own visibility
Whoever reports against the target should not be the only one who can see the account. Keep admin access to every ad account, agree the metric definitions before the first report, and spot-check the reported ROAS against your own books monthly. The agency audit checklist is the full list of checks, free.
Hand over the floor with the target
A media buyer working from one number treats everything above it as success. Give both: the target from this page, and your breakeven from the Breakeven ROAS Calculator - including the first-tier version that carries fixed costs. Between floor and target is a negotiation about growth rate; below the floor is a stop, and everyone should know where it sits.
None of this is anti-agency - HoloGrowth runs ads for many of its partner brands. It is pro-visibility: a target only does its job when both sides read the same number, defined the same way, from the same source. Set the scope once, in writing, and the target can't be gamed - by anyone, including you.
Already at $1M+/year and spending $30K+/month on ads?
The target is set. Is the number reported against it real?
This calculator gives you the number to hand over. It can't tell you whether the ROAS coming back is measured the way you scoped it - and at your spend, that gap is where the money goes. On a free 30-minute call we sanity-check your numbers against your P&L and name your most likely constraint live.
For brands at $1M+ per year spending $30K+/month on ads. 8 strategy calls a week.
Target ROAS, answered.
Work backward from your margin, not forward from a benchmark. Compute your contribution margin before ads (what is left of each order after COGS, shipping, and payment fees, as a % of AOV), decide the net margin you want to keep after ad spend, then divide: target ROAS = 100 ÷ (contribution margin % minus target margin %). Example: 52% contribution margin and a 15% net target gives 100 ÷ 37 = 2.7x. Hand that in as a blended, account-level target - and remember Meta's own ROAS column is its self-attributed number, so grade the target against blended revenue from your backend, not against Ads Manager alone.
There is no universal number - your margin structure sets it, which is why anyone quoting a target without knowing your margins is guessing. The same 15% net-margin goal needs a 2.7x target at a 52% contribution margin but a 5x target at a 35% contribution margin. Run your own AOV, COGS, shipping, and fees through the calculator above: the target that comes out is the only one that means anything for your business.
Breakeven ROAS is the floor - the return where an ad-driven sale stops losing money, set by your AOV and variable costs. Target ROAS sits above it: the return that also leaves the net margin you actually want to keep. This page sets the target; the Breakeven ROAS Calculator owns the floor math, including the two-tier version that accounts for fixed costs.
No. A target ROAS is a constraint, not a score: raise it and the account buys fewer, cheaper conversions, which usually means less new-customer volume and slower growth. Worse, an aggressive target pushes optimization toward the conversions that are easiest to claim - retargeting and branded search - which inflates the reported ROAS while adding little revenue you would not have gotten anyway. The right target is the one your margin structure demands, held against blended new-customer numbers from your own books - not the biggest number you can name.
No. The math runs entirely in your browser - nothing you type is stored or sent anywhere, and no email is required. It is free because the hard part is not the formula, it is holding the target against a ROAS you can trust. When you get to the point where the reported number is the problem, that is what the free Strategy Call is for.
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Free Target ROAS Calculator by HoloGrowth: https://hologrowth.com/tools/target-roas-calculator/