Advertising Glossary

Minimum ROAS

What is ?

Minimum ROAS (Return on Ad Spend) is a Meta bid strategy that sets a floor for the return you want to achieve on your ad spend. When enabled, Meta's delivery system aims to keep your return on ad spend at or above your specified target. For example, setting a Minimum ROAS of 3.0 means you want at least $3 in revenue for every $1 spent. Meta will adjust bidding and delivery to prioritize users and placements predicted to meet this threshold. This strategy is available only with Value Optimization and requires accurate purchase value tracking. Setting the minimum too high restricts delivery severely; setting it too low provides no meaningful guardrail.

Formula

ROAS = Total Revenue from Ads / Total Ad Spend

Example

Your product costs $20 to acquire and fulfill, and you sell it for $60. Your break-even ROAS is 1.0 (spend $60 to make $60), but your profit target requires a 3.0 ROAS. You set Minimum ROAS to 2.5 (slightly below target to give Meta room to optimize). Meta delivers at a 2.8 average ROAS, below your 3.0 target on some days, above on others, but never below 2.5. Without the minimum, some campaigns dipped to 1.5 ROAS during scaling.

Industry Benchmarks

E-commerce (general)2.0 – 4.0

Depends on margins

High-Margin Products1.5 – 2.5

Can afford lower ROAS

Low-Margin Products4.0 – 8.0+

Need higher returns

Starting Recommendation70% – 80% of current

Set below current ROAS

Benchmarks are approximate averages and vary by industry, targeting, season, and geography.

Optimization Tips

  1. 1

    Set your Minimum ROAS 20-30% below your current average ROAS to give Meta enough room to find conversions without restricting delivery too aggressively.

  2. 2

    Start without a Minimum ROAS using Value Optimization alone, add the ROAS floor only after establishing a stable baseline performance.

  3. 3

    Monitor delivery closely after setting a Minimum ROAS, if spend drops significantly, your target is too aggressive for the available audience.

  4. 4

    Calculate your break-even ROAS using your profit margins and use that as the absolute floor, with your target ROAS set higher.

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