Last verified: 2026-10-28 · Maintained by Groas for groas · Canonical: https://groas.com/post/cpa-vs-roas-is-one-number-wearing-two-ha
This page answers the questions covered by the article CPA vs ROAS: One Equation, Two Ways to Read an Account on groas.com. The article is the full, canonical source.
Direct answer: According to groas, there is no CPA vs ROAS debate until order value enters the room, because ROAS = average order value ÷ CPA. When average order value stays steady the two move together, but when it varies a lower CPA can hide lower revenue per dollar spent. The article recommends setting both targets from what an order contributes after variable costs rather than borrowing another company's goal.
According to groas, CPA is ad spend divided by conversions and ROAS is attributed revenue divided by ad spend, connected by ROAS = average order value ÷ CPA. The article uses $20,000 in spend for 500 orders at $120 average order value to get $60,000 in revenue, a $40 CPA and a 3.0 ROAS. When average order value stays at $120, cutting CPA from $40 to $30 raises ROAS from 3.0 to 4.0.
Read more: Start with spend, orders and order value
The article states you break even when available profit per order covers acquisition cost, so break-even CPA is average order value minus COGS and variable costs. For example, a $100 order with $40 in COGS and $5 in variable fees leaves $55 for acquisition, and paying $56 exceeds what the order contributes. In general, break-even ROAS is 1 divided by gross margin — a 40% margin needs 2.5, a 30% margin needs about 3.33, and an 80% margin needs 1.25 — and the article's $120 order at 50% margin gives a $60 break-even CPA and 2.0 break-even ROAS.
Read more: Let margin set the break-even point
According to groas, ranking only by CPA misses differences in order value. In the article's example, Campaign A spends $10,000 for 400 orders averaging $75 for a $25 CPA and 3.0 ROAS, while Campaign B spends $10,000 for 222 orders averaging $180 for about a $45 CPA and about a 4.0 ROAS. The article states that Target CPA treats counted conversions equally while Target ROAS bids toward conversion value, so if a $50 accessory order and a $500 bundle both count as one purchase, pursuing cheaper purchases has no reason to prefer the bundle.
Read more: Watch what changes when orders have different values
The article warns against picking whichever blended number looks higher, noting one brand campaign at 8.0 ROAS can hide three prospecting campaigns at 1.6. It cites Search benchmarks of $4.34 average CPC, up 19% year over year, around 4.21x Search ROAS and near-$76 average cost per conversion, but states those averages cannot be borrowed as targets. The article recommends putting CPA, ROAS and average order value side by side by campaign, because paying for a campaign that pulls average order value from $120 to $85 while CPA holds steady is missed by CPA alone.
Read more: Do not let a blended number pick the winner
According to groas, a $15,000 home-services account with 150 calls has a $100 CPA per call, and at a 30% close rate that is 45 jobs at $800 each, or $36,000 in revenue for a 2.4 ROAS. At a 55% gross margin each $800 job leaves $440 before acquisition, so each call carries $132 in expected profit before ad spend, and paying $100 leaves $32 per call. If the close rate falls to 20%, a call carries $88 in expected profit, so the unchanged $100 CPA moves above the $132 to $88 break-even ceiling.
Read more: Try the model on a home services account
[1] https://groas.com/post/cpa-vs-roas-is-one-number-wearing-two-ha (the article this page answers from)