Why ROAS alone is the wrong winner
Google search routinely posts 4–8x ROAS because it captures existing demand (people already searching for your product). TikTok and Meta often post 1.5–3x ROAS but generate orders that would never have existed — new demand creation. Judging on ROAS alone systematically under-funds discovery channels and caps your growth ceiling.
- • Google = existing demand harvest. ROAS high, scale capped by search volume.
- • Meta = warm retargeting + lookalikes. Middle ground on both ROAS and scale.
- • TikTok = cold demand creation. Lower ROAS, unbounded scale, viral potential.
Break-even ROAS is the floor, not the target
Break-even ROAS = 1 ÷ gross margin. At 60% margin, break-even is 1.67x. Anything above that is positive gross-profit ad spend. Most healthy DTC brands target 2.5–4x blended ROAS — enough cushion for overhead, returns, and CAC payback within 60–90 days.
How to actually allocate budget
Run all 3 channels at minimum testing budget ($500–$2k/mo each) for 60 days. Compare net profit per channel — not ROAS. Reallocate 80% of incremental budget to the winner each month. Most DTC brands eventually settle at 40/40/20 (Meta/Google/TikTok) or 50/30/20 depending on category.
TikTok, Meta, and Google Ads quote ROAS in incomparable ways — TikTok's 7-day click + 1-day view default looks dramatically better than Meta's 7-day click and Google's data-driven attribution. This calculator normalizes across the three so you can compare channel efficiency honestly and allocate spend based on apples-to-apples math.
What each input means
Get these inputs right and the output is reliable. Get them wrong and the calculator just multiplies bad assumptions.
Channel spend (per channel)
Total monthly ad spend on each channel.
Typical range: Pull from each platform's billing.
Platform-reported revenue
Revenue each platform claims it drove.
Typical range: Always inflated 30–80% above ground truth.
Ground-truth revenue (Shopify/Stripe)
Actual purchase data from your store.
Typical range: Use UTM-tagged sessions where possible.
Contribution margin %
AOV minus COGS, shipping, processing.
Typical range: 30–60% DTC; 70–90% digital.
LTV multiplier
Year-1 repeat revenue per acquired customer.
Typical range: 1.2–2× for consumer DTC; 3–5× subscription.
Worked examples
Real scenarios with the math walked through line by line.
DTC apparel cross-channel month
Scenario: Spend: TikTok $5k, Meta $10k, Google $8k. Platform-reported ROAS: TikTok 4.2, Meta 2.8, Google 5.1. Shopify-attributed revenue total $42k.
Math: Platform-reported total revenue = $20.6k+$28k+$40.8k = $89.4k. Reality = $42k. MER = $42k ÷ $23k = 1.83. Channel allocation can't be trusted from platform-reported numbers — run incrementality test or geo holdout.
Outcome: When platform-reported revenue >2× Shopify reality, channel-level attribution is unreliable. Use MER + incremental tests to allocate budget.
Clean attribution test
Scenario: Geo-holdout test on TikTok: pause 30% of US states for 2 weeks. Revenue drop in paused states = $4k. Spend in paused states would have been $2k.
Math: Incremental ROAS in paused-state geo = $4k ÷ $2k = 2.0. Platform-reported was 4.5. True incremental ROAS = 44% of platform-reported.
Outcome: TikTok actually drove 44% of what it claimed. Adjust mental model accordingly when allocating across channels.
Common mistakes
Where this calculation usually goes wrong in the real world.
- Comparing platform-reported ROAS across channels. Each uses different attribution windows.
- Skipping the contribution-margin step. A 4× ROAS at 25% margin is the same as 2× at 50% margin.
- Modeling on view-through attribution. TikTok includes 1-day view-through by default, which inflates apparent ROAS 30–60%.
- Killing the lowest-reported-ROAS channel without incrementality testing. Often it's the most incremental.
- Ignoring channel interaction effects. TikTok awareness often lifts Google branded-search conversions; killing TikTok hurts Google ROAS.
When to use this calculator
- Quarterly channel allocation review.
- Deciding whether to add or remove a paid channel.
- Defending budget to a CFO or board.
- Pre-launch budget modeling for a new product.
Glossary
MER
Marketing efficiency ratio = total revenue ÷ total marketing spend. Channel-agnostic, attribution-resistant.
Incremental ROAS
Revenue that wouldn't have occurred without the ads ÷ ad spend. Gold-standard channel efficiency metric.
View-through attribution
Crediting a conversion to an ad the user saw but didn't click. Inflates platform-reported ROAS.
More questions answered
How do I run a geo-holdout test?
Pause one channel in 25–40% of US states (chosen to match aggregate population/demo of the kept states) for 2–4 weeks. Compare revenue trend in paused vs. running geos vs. baseline. The incremental revenue = paused-geo revenue gap × scaling factor. Costs you ~$5–15k in lost revenue but produces channel-truth data worth 6–12 months of better allocation decisions.
Why is my TikTok-reported ROAS so much higher than Shopify's?
TikTok defaults to 7-day click + 1-day view attribution. Meta is similar but slightly conservative. Both over-attribute organic and cross-channel buyers. To get closer to ground truth: switch TikTok and Meta to 7-day click only, ignore view-through entirely, and use MER as your primary efficiency metric.
Should I trust Google Ads ROAS more than TikTok/Meta?
Slightly — Google's data-driven attribution uses observed conversion paths rather than last-click, and search keyword data is genuinely incremental for high-intent queries. But branded-search ROAS is heavily over-attributed (those users would have found you anyway). Carve out branded vs. non-branded search separately to see real Google incrementality.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
The Google Ads ROAS Playbook: Modeling Spend Before You Burn It
A structured approach to modeling ROAS before scaling Google Ads — break-even CPA, gross-margin-adjusted ROAS, and the assumptions most spreadsheets get wrong.
Read the guideNewsletter Monetization in 2026: Paid Subs vs Sponsorships vs Both
How paid newsletters actually pencil — conversion rates from free to paid, churn assumptions, and when sponsorship-led models out-earn subscription-led ones.
Read the guideMethodology last reviewed: 2026-05 by the RevenueLab editorial team.
FAQ
Is TikTok Ads ROAS lower than Meta and Google?
Yes, on average. TikTok ROAS typically lands at 1.2–2.5x, Meta at 2–4x, Google search at 4–8x — because TikTok creates new demand while Google captures existing demand. But TikTok scales beyond Google's intent ceiling and is the strongest discovery channel for under-$100 AOV products.
What's a good ROAS in 2026?
Break-even ROAS = 1 ÷ gross margin. At 60% margin, break-even is 1.67x; healthy is 2.5–4x. At 30% margin (low), you need 3.3x just to break even. For B2B SaaS with 80% margins, anything above 1.25x is profitable on a marginal basis.
Should I run all 3 channels or focus?
Brands under $50k/mo ad spend usually focus on 1–2 channels (Meta + Google is most common). Above $50k/mo, running all 3 typically lifts blended performance 15–25% because each channel reaches different audiences. Below $50k/mo, splitting too thin hurts learning.
Why is Google CPM so much higher than TikTok and Meta?
Google search CPMs are inflated by intent — every impression is someone actively searching for your category. Despite a $45 CPM, Google's 3.5% CTR + 4.5% CVR often produces lower CAC than TikTok's $8 CPM at 1% CTR + 1.5% CVR. Always judge channels on CAC and net profit, not CPM.
How do I know which channel won?
Net profit per channel = (orders × AOV × gross margin) – ad spend. The channel with the highest net profit wins — not the highest ROAS. A 6x-ROAS Google campaign spending $2k can net less profit than a 2x-ROAS TikTok campaign spending $20k.