Your contribution margin sets your minimum ROAS.
Break-even return on ad spend is 1 divided by your contribution margin, before ad spend. At 25%, you need 4× just to break even. Revenue is just a number: if you’re doing $10 million on 5% margin, your business is going down the drain.
At a 25% contribution margin, every $1 of ads has to bring in $4.00 of sales before you make anything.
Source · The formula: 1 ÷ contribution margin, before ad spend