Good ROAS for Facebook 2025?

The "Death of Cheap Ads" in 2025

Return on Ad Spend (ROAS) has fundamentally changed in the post-iOS14 era. In 2020, achieving a 10x ROAS (spending $1 to make $10) was a common brag on Twitter. In 2025, seeing a 10x ROAS usually means one of two things: your attribution software is lying to you, or you are severely underspending on retargeting audiences that would have bought anyway.

The landscape has shifted from "Arbitrage" (finding underpriced attention) to "Economics" (having a business model that can withstand expensive attention). CPMs (Cost Per Mille) on Meta platforms have risen approximately 40% since 2022. This inflation means that if your conversion rate and Average Order Value (AOV) stayed flat, your ROAS mathematically collapsed.

A "Good" ROAS is no longer a static number like "3.0". It is a dynamic variable dependent entirely on your Profit Margin. A business selling digital courses with 95% margins prints cash at a 1.2x ROAS. A business selling heavy furniture with 15% margins goes bankrupt at a 2.5x ROAS. Understanding this sliding scale is the difference between scaling a company and burning venture capital into ash.

Calculating Your "Survival ROAS"

Before you ask for a "Good" ROAS, you must know your "Survival" (Break-Even) ROAS. Without this, you are flying blind. The formula is brutally simple but often ignored by rookie media buyers.

Let's apply this to three scenarios in 2025:

• Dropshipping (Low Margin): You sell a gadget for $50. Product cost + shipping is $40. Your margin is $10 (20%). Break-Even ROAS = 1 / 0.20 = 5.0x. You need to make $5 revenue for every $1 ad spend just to break even. This is "Hard Mode."
• Private Label Brand (Mid Margin): You sell branded cosmetics for $60. COGS is $15. Margin is $45 (75%). Break-Even ROAS = 1 / 0.75 = 1.33x. Anything above 1.33x is profit. This is "Scaling Mode."
• SaaS / Digital Product (High Margin): You sell a subscription for $100/mo. COGS is ~$0. Margin is ~100% (technically usually 90% with support costs). Break-Even ROAS = 1 / 0.90 = 1.11x. You can spend $90 to acquire a $100 customer and still be profitable on day 1. This is "God Mode."

When a guru tells you "2.0 is bad," they assume you are in Dropshipping. If you are in SaaS, 2.0 is a money-printing machine. Context is everything.

Case Study: The "High ROAS" Trap

In Q3 2024, we audited a direct-to-consumer apparel brand ("Brand X") that was obsessed with maintaining a 4.0x ROAS. Their CMO refused to scale any campaign that dipped below a 4.0, believing that high efficiency equaled high success.

They were spending $50,000/month generating $200,000 in revenue (4.0x ROAS). Their profit margin was 60%, meaning their Break-Even ROAS was only 1.66x. They had a massive buffer between 1.66x and 4.0x that they were refusing to use.

We advised them to "Break the ROAS" intentionally. We scaled spend from $50k to $150k/month. Naturally, as we reached broader, colder audiences, the ROAS dropped from 4.0x to 2.2x. The CMO panicked. "Our efficiency is ruined!" he claimed.

But look at the Net Profit dollars:

• Scenario A (Old): $200k Revenue - $80k COGS (40%) - $50k Ads = $70,000 Net Profit.
• Scenario B (New): $330k Revenue (implied by 2.2x on $150k spend) - $132k COGS - $150k Ads = $48,000 Net Profit.

Wait. The profit went DOWN. Why? Because the ROAS decay (4.0 → 2.2) was too steep. We pushed too hard. This is the danger of scaling blindly. The optimal point in the curve was actually found at $100k spend with a 2.9x ROAS, which yielded $94,000 Net Profit.

The lesson? Maximum ROAS does not equal Maximum Profit. But neither does blindly scaling. You must find the "Profit Peak" — the point where your Marginal ROAS (the return on the next dollar spent) hits your Break-Even line.

Geography Matters: US vs UK vs Global

Your location dictates your CPM, which dictates your ROAS. In 2025, advertising in the USA is the most expensive sport on earth.

• United States: Competitive CPMs are $25-$40. Expect lower ROAS (1.5x - 2.5x). Volume is high, but efficiency is harder.
• United Kingdom / Canada: CPMs are typically 20-30% lower than the US. You can often squeeze out a 3.0x ROAS here more easily.
• Europe (Germany/France): CPMs can be 50% lower, but conversion rates vary due to local payment preferences and language barriers.
• Developing Markets (Brazil/India): CPMs are dirt cheap ($2-$5). You might see 10x ROAS, but the AOV is often so low that the net profit dollars are negligible.

Future Outlook: The AI Era (2026-2030)

Looking ahead to the latter half of the decade, the concept of "ROAS" itself may disappear. Meta and Google are already pushing advertisers towards "Value Based Bidding" where you don't target a ROAS, but an ROI based on predicted LTV.

By 2027, manual bidding will be obsolete. AI agents from Meta (Advantage+) will control 100% of the targeting. Your only lever will be Creative Strategy. If you cannot produce winning video creative that holds attention, no amount of media buying hacks will save your ROAS.

Furthermore, the "Third-Party Cookie" is finally dead (Chrome deprecation completed). This means tracking attribution is inherently fuzzy. We predict a shift towards MER (Marketing Efficiency Ratio) as the primary metric. Instead of obsession over "Did Facebook drive this sale?", brands will look at "Total Sales / Total Ad Spend". If that number is healthy (e.g., 4.0 MER), you keep spending, regardless of what the Facebook dashboard says (which might report a 1.2x ROAS due to signal loss).

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Disclaimer: This content is for educational purposes only and does not constitute financial or legal advice. Consult a professional before making business decisions.