How do I know the right ROAS target to give my ad agency?

Your ROAS target depends on your unit economics. This calculator uses your actual COGS, variable costs, and fixed costs to determine the minimum ROAS your marginal ad spend needs to achieve. The break-even marginal ROAS equals 1 divided by your CM2 percentage (contribution margin after variable costs). Anything above that generates incremental profit.

What is the difference between blended ROAS and marginal ROAS?

Blended ROAS is your total revenue divided by total ad spend. Marginal ROAS is the return on each additional dollar of ad spend. Because of diminishing returns, marginal ROAS on new spend is almost always lower than your current blended ROAS. This calculator shows both so you can set realistic targets for your agency when scaling.

Can I scale ad spend and still be profitable?

Yes, as long as the marginal revenue from additional ad spend covers its variable costs plus the ad spend itself. This calculator determines the exact break-even point and shows you how much additional profit (or loss) each level of new spending generates, so you can scale with confidence instead of guessing.

Free Tool

Ad Spend Scaling Calculator

Find out exactly how much more you can spend on ads—and what ROAS target to give your agency—without killing profitability.

Most eCommerce founders scale ad spend the wrong way. Their agency says "give us more budget and we'll grow revenue," so they bump spend by 20–30% and hope for the best. Three months later, revenue is up but profit is flat—or worse, down. The problem is not that they spent more. The problem is they never calculated their break-even marginal ROAS.

Here is the reality: when you increase ad spend, the marginal return on each new dollar is almost always lower than your current blended ROAS. Diminishing returns are real. The question is not "will my ROAS drop?" but rather "how low can my marginal ROAS go before I start losing money on each incremental dollar?"

This calculator answers that question in about 60 seconds. Plug in your current P&L—revenue, COGS, variable costs, ad spend, and fixed overhead—then tell it how much more you want to spend. It will give you three numbers that matter: your minimum break-even ROAS on the new spend, a recommended marginal ROAS target, and the new blended ROAS to hand your agency. It even generates a ready-to-send email script so you can communicate the new targets clearly.

Built by the fractional CFO team at Eightx, this tool uses the same contribution margin framework we use with eight-figure brands every day. No guessing, no gut feel—just math.

Your Current P&L

Monthly Revenue

Cost of Goods Sold (COGS)

Gross Margin (CM1) $2,100,000 (70.0%)

Variable Costs (as % of revenue)

Adjust these to match your business. Common defaults are pre-filled.

Shipping

Payment Processing

Affiliate Commissions

3PL / Fulfillment

Sales Commission

Other Variable

CM2 (after variable costs) $1,365,000 (45.5%)

Current Monthly Ad Spend

Fixed Costs (Overhead)

Contribution Margin

$465,000

Net Profit

$315,000

Profit Margin

10.5%

Blended ROAS

3.33x

How Much More Do You Want to Spend?

Additional Monthly Ad Spend

How much more per month beyond your current spend?

Target Marginal ROAS (optional override)

Leave blank to auto-calculate, or set a specific marginal ROAS target.

New Blended ROAS Target

3.25x

Give this number to your agency

Break-Even Marginal ROAS

2.20x

Minimum to not lose money

Marginal ROAS Target

2.73x

What the new spend needs to hit

Before vs. After Comparison

Metric	Current	Projected	Change
Revenue	$3,000,000	$3,409,293	+$409,293
Total Ad Spend	$900,000	$1,050,000	+$150,000
Blended ROAS	3.33x	3.25x	-0.09x
Contribution Margin	$465,000	$501,227	+$36,227
Net Profit	$315,000	$351,227	+$36,227
Profit Margin	10.5%	10.3%	-0.2pp

Ready-to-Send Agency Email

Hey [Agency], I know you've suggested we spend more on ad spend this coming month. I've run the numbers and I've come up with new targets for you to manage to. Last month we spent $900,000 on ad spend at a Blended ROAS of 3.33x. You can spend an additional $150,000 this month, with the new Blended ROAS target being 3.25x. This allows us to grow spend & revenue while hitting our profit goals.