Target ROAS
Target ROAS recommends a profit-optimal ROAS (or ROI) target for your ads campaigns. The engine calculates break-even ROAS based on your margin, adds a cushion for safety, and recommends a target that maximizes profit per ad dollar.
How it works
- Break-even ROAS — calculated as
1 / profit margin. If you make 20% profit per sale, break-even ROAS is 5 (you need $5 revenue for every $1 ad spend to break even). - Target margin cushion — the engine applies a cushion (the larger of your shop-wide margin or 20%) to ensure safety. So if break-even is 5, and the cushion is 20%, the recommended ROAS target is 5 × 1.20 = 6.
- Campaign-specific — if a campaign is realizing a different margin (e.g., a niche product selling at lower margin), the engine adjusts the break-even calculation for that campaign.
- Deploy — sets the recommended ROAS target on your Shopee or TikTok campaign.
Custom target ROAS floor
On a Shopee campaign's detail panel you can set your own profit-adjusted ROAS floor — the minimum profit-per-ad-dollar the optimizer must hold recommended spend at or above. It shapes the next recommendation and is not pushed to Shopee.
The value you type is a profit-adjusted ROAS, not the gross ROAS Shopee shows. They mean different things:
- Profit-adjusted ROAS (what you enter):
P = profit ÷ ad spend, where profit is gross contribution — revenue minus COGS and platform fees, before subtracting ad spend. It's how much profit each $1 of ad spend generated. - Shopee gross ROAS (what Seller Centre shows):
R = GMV ÷ ad spend. Revenue per $1 of spend — it ignores your costs.
Converting between them
Both are "something ÷ ad spend" over the same campaign, so they differ only by margin m = profit ÷ GMV, which carries the whole COGS-and-fee structure:
P = profit ÷ ad spend = (m × GMV) ÷ ad spend = m × R
That rearranges to a plain scale — no shift:
Shopee ROAS R = P ÷ m
The ÷ m scales revenue back to profit. The settings popover shows this equivalent Shopee ROAS live as you type.
Inputs
| Symbol | Meaning | Source |
|---|---|---|
P | Profit-adjusted ROAS floor | The value you type |
m | Campaign margin | profit ÷ Shopee-reported GMV for the campaign's products (falls back to 20% if unavailable) |
R | Equivalent Shopee gross ROAS | Computed: P ÷ m |
Worked example. A real campaign realizing profit-adjusted ROAS P = 6.2 at margin m = 0.246 maps to R = 6.2 ÷ 0.246 = 25.2 — exactly its reported Shopee ROAS. A floor of P = 1 on that campaign is R = 1 ÷ 0.246 ≈ 4.1.
profit ÷ spend ≥ your floor); it never converts to a Shopee ROAS. Note the Target ROAS recommendation is a different feature that takes a net-of-spend profit target, so its formula carries an extra + 1 ((target profit ÷ ad spend + 1) ÷ margin) — don't apply that here.Shopee Ads vs. TikTok
- Shopee Ads (target-roas kind) — sets a ROAS target on manual or auto bidding campaigns. You can enable Shopee's GMV Max mode (which auto-optimizes ROAS) or stick with manual targets.
- TikTok (tiktok-target-roas kind) — sets an ROI target on GMV Max campaigns. The profit math is identical to Shopee; only the platform API differs.