An Acme Watches order averages $90 with $45.80 of contribution. To keep 15% of revenue as profit ($13.50), it can spend $45.80 - $13.50 = $32.30 on ads per order. Target ROAS is 90 / 32.30 = 2.79, against a break-even ROAS of 1.97.

Break-even keeps you from losing money; target ROAS tells you whether you are making enough. It gives the team one line to scale or cut on, and it makes the trade-off explicit: a lower target buys more volume at thinner profit, a higher one protects margin and limits growth.

Set different targets for different jobs: a lower one for new-customer prospecting, where repeat purchases add value later, and a higher one for retargeting. Revisit it when prices, costs or AOV change, and judge against it with the same attribution window you used to set it.