TL;DR: The New ROAS Playbook

• The Shift: In 2026, a «good» ROAS isn’t a static number like 400%. It’s dynamic based on your margins and Customer Lifetime Value (CLV).
• The Problem: Optimizing strictly for high ROAS often kills your volume and growth.
• The Solution: Use profit-based bidding and feed structure SEO to drive incremental value, not just efficient clicks.
• The Proof: How Lakritsroten increased ROAS by 243% while increasing spend.

Overview

Is a 400% ROAS «good»? Not if your profit margin is 10%. In the era of automated bidding and AI, Return on Ad Spend (ROAS) has become the defining metric for Google Ads success. However, treating it as a flat benchmark can be dangerous. This guide breaks down exactly how to calculate a profitable ROAS for your specific business, why Google Shopping requires a different approach, and how AI automation can help you hit aggressive targets without throttling growth.

Read the full breakdown below.

How to Calculate Your ROAS (The Real Formula)

Calculating ROAS is straightforward math, but interpreting it requires business context.

The standard formula is: ROAS = (Total Ad Revenue/Total Ad Spend)*100

• Example: If you spend $1,000 and make $5,000, your ROAS is 500% (or 5:1).

The «Break-Even» Trap:

Most brands aim for a 4:1 ROAS. But if your COGS (Cost of Goods Sold) and shipping take up 75% of your revenue, a 4:1 ROAS means you are just breaking even. You aren’t making profit.

At BrightBid, we advise clients to calculate their Break-Even ROAS first, then set targets above that based on growth goals.

What is a «Good» ROAS in 2026?

While the industry average hovers around 200%, a «good» ROAS is entirely dependent on your sector.

• High Margin (SaaS/Digital): A ROAS of 150-200% might be amazing because the Customer Lifetime Value is so high.
• Low Margin (Retail/Electronics): You might need 800%+ just to stay profitable.

The Shopping Nuance:

For Google Shopping, intent is higher. Users see the price and image before they click. Therefore, «good» ROAS for Shopping is typically higher than Search. If your Search campaigns run at 300%, your Shopping campaigns should aim for 400-500%.

How to Increase ROAS: The 2026 Strategy

Increasing ROAS isn’t just about lowering bids. In 2026, it’s about Data Quality.

1. Fix Your Feed (The «Campusbokhandeln» Method)

Google Shopping doesn’t use keywords; it uses your product feed. If your feed titles are generic, you pay a premium for bad traffic.

• The Case Study: When we restructured the product feed for Campusbokhandeln, we didn’t just change bids. We made the data readable to Google’s AI.
• The Result: +355% Conversion Value. Better data meant Google could find cheaper, higher-intent conversions, naturally lifting ROAS.

2. Leverage Target ROAS (tROAS) with AI

Manual bidding is obsolete. Google’s Target ROAS (tROAS) algorithm adjusts bids in real-time for every auction.

• The Secret: Don’t set your tROAS too high initially. If you set it to 800% when your history is 300%, Google will stop spending.
• BrightBid Strategy: We use «Stepping Stone» increments. We set the target slightly above historical performance, let the AI stabilize, and then raise it again.

3. Refine Audience Targeting (The «Lakritsroten» Method)

High ROAS comes from showing ads to people ready to buy.

• The Case Study: For Lakritsroten, we didn’t just rely on Shopping. We unified their signals, using Search Intent to power Remarketing lists.
• The Result: +243% ROAS. By focusing budget on users who had already shown intent, we stopped paying for «window shoppers.»

Navigating Changes: The Role of AI

In 2026, ROAS is volatile. Competitors, economy, and algorithm updates (like Andromeda) shift the landscape daily.

Manual optimization cannot keep up. You need an AI layer that monitors these shifts 24/7.

• Automated Bid Adjustments: Reacts to competitor price drops instantly.
• Negative Keyword Scouting: Blocks wasteful spend before it drains your ROAS.
• Feed Hygiene: Ensures your products never get disapproved during peak seasons.

Google Ads ROAS: Frequently Asked Questions

Is a higher ROAS always better?

No. A very high ROAS (e.g., 2000%) often means you are under-spending. You are capturing the «low hanging fruit» but missing out on massive growth. Sometimes, lowering your ROAS target from 10:1 to 6:1 can double your total profit.

How does PMax affect ROAS?

Performance Max (PMax) is designed to maximize conversion value. It works best when you give it strong audience signals (like customer lists) so it doesn’t waste budget on low-ROAS placements.

Can I control ROAS for specific products?

Yes. You should segment your campaigns. Put high-margin products in one campaign with a lower ROAS target (to drive volume) and low-margin products in another with a strict high ROAS target.