Why purchase value and ROAS aren’t profit
Meta’s purchase value is revenue. ROAS is that revenue divided by spend. Neither number knows what your products cost.
- It’s before costs. Product cost, shipping, payment fees and packaging all come out of that revenue. A 3× ROAS on a product with a 30% margin loses money.
- It may include tax and shipping. The value your pixel sends depends on your setup. If it sends the order total, VAT and shipping charges count as ad revenue.
- Attribution can over-count. Meta credits purchases within its attribution window, including some after a view without a click. Google Ads may claim the same order. Add up each platform’s reported sales and you can get more than your store took in.
Your store’s orders are the only numbers every channel agrees on. Start there.
The three numbers you need
- What your orders leave before ads. Revenue excluding tax, minus refunds, product costs, shipping, payment fees and other per-order costs. This is your contribution.
- Ad spend per day. Meta spend from Ads Manager, plus every other platform you pay for.
- Break-even MER. MER is your total revenue divided by total ad spend. Break-even MER is the point where ads eat all of your contribution.
Break-even MER = revenue ÷ what orders leave before adsIf your MER is above this number, ads leave you something. Below it, they cost more than they bring in.
The weekly check, step by step
- Pick a period: yesterday, or the last 7 days. Use the same dates everywhere.
- From WooCommerce, take total revenue excluding tax, after refunds.
- Take off product costs, shipping, fees and other per-order costs. The rest is what orders left before ads.
- Take Meta spend for the same dates, then add Google Ads and any other ad spend.
- Subtract all ad spend from what orders left. That’s your profit after ads, before running costs.
- Work out MER and break-even MER, and compare them.
A worked example
Here is one week from a sample home goods shop that runs Meta and Google Ads.
| Line | Amount |
|---|---|
| Revenue, excluding tax, after refunds | $8,400 |
| Product costs, shipping, fees and other | −$3,780 |
| What orders leave before ads | $4,620 |
| Meta spend | −$2,100 |
| Google Ads spend | −$600 |
| Profit after ads | $1,920 |
MER is $8,400 ÷ $2,700 = 3.11. Break-even MER is $8,400 ÷ $4,620 = 1.82. The shop’s MER sits well above break-even, so its ads pay for themselves this week. Total ad spend could rise by up to $1,920 before profit after ads hits zero, if sales held steady. They rarely do, so treat that as a ceiling, not a target.
Go down to product level
A good week overall can hide a campaign that sells a product at a loss. Check which products each campaign promotes. Then split the campaign’s spend across those products by weight.
Say a $1,000 campaign promotes a lamp and a vase, weighted 60/40. The lamp carries $600 of spend and the vase $400. If the lamp’s orders left $1,100 before ads, it made $500 after ads. If the vase’s orders left $320, it lost $80.
| Product | Left before ads | Ad spend | After ads |
|---|---|---|---|
| Lamp (60%) | $1,100 | −$600 | $500 |
| Vase (40%) | $320 | −$400 | −$80 |
| Campaign total | $1,420 | −$1,000 | $420 |
The campaign looks fine as a whole. The vase is the leak.
What to do with the answer
- Cut or cap spend on loss-making products. If a product’s ads cost more than its orders leave, lower its budget or take it out of the campaign.
- Raise budget where there’s headroom. A product whose MER sits far above its break-even can carry more spend. Raise it in steps and re-check each week.
- Check shipping and fees before blaming ads. A free-shipping threshold or a carrier price rise can shrink what orders leave. Then the same ads look worse even though nothing changed in Meta.
To see how much spend a given margin can carry, try the break-even ROAS calculator.