Updated version –
The ideal ROAS (Return on Ad Spend) for your first Performance Max campaign depends on several factors as every campaign has different goals and different spends based on thier marketing budget, also every business has different target audience, basis on which your ROAS can be changed.
Therefore, there is no one specific answer to this question.
A ROAS of 2 or above, which indicates that every dollar spent on advertising generates two dollars in revenue, is regarded as “good.” If you want to get the best results your ideal ROAS can be 3 or above. This is considered a benchmark for a profitable performance max marketing campaign.
Calculating your own ROAS is not that difficult, you can do that in very simple steps as mentioned below:
First determine your breakeven point for Profit –
Your breakeven point should never be equal to your ROAS target. If it is too low, your marketing campaigns are losing money and you are not making the profits, so you your return ad spend will either be 0 or negative. You can utilise your margin on the goods to determine the breakeven threshold for your ROAS.
Calculate your break even point – Break even point = 100% / Margin %
Second determine a Good ROAS target, now that you have break even-
There are multiple ways to to determine a Good ROAS target, either you can use Googles ads bid simulator or you can calculate your profit margin as per break even andt then decide your marketing budget to get the best ROAS.
As per our ecom experts it should it be atleast of 2 or above, to have Performance campaigns running optmizely.
Also, if your are running a Performance Max campaign for the first time, it’s important to test different targeting options, ad formats, and bidding strategies to determine what works best for your business. It’s also important to monitor and adjust campaign performance regularly to ensure that you are achieving your advertising goals and maximizing your return on investment (ROI).
Nice article from ROAS POV