How To Know If Your Meta Ads Are Actually Profitable

IS YOUR META ADS CAMPAIGN PROFITABLE? HERE'S HOW TO KNOW FOR SURE!

You’ve launched your Meta Ads campaign. The clicks are rolling in. Maybe even a few sales. But here’s the million-dollar question that too many online business owners omit:

Is my campaign actually profitable? 

Too many business owners look at their ad results and guess.

They see purchases and assume it’s working. But guessing is not a strategy.

Let’s break down a simple, no-fluff formula to know exactly when your ad is working—and when it’s not.

That way you can turn off those that are underperforming and keep on those that are.

FIRST, LET'S DEFINE "PROFITABLE"

Before we dive into formulas, let’s be clear: when we say profitable, we’re talking about the amount of money you keep after covering your expenses.

That includes: 

•  Your cost of goods sold (COGS)
•  Your Meta advertising costs
•  And ideally, a slice of actual profit (you’re in this to make money, right?).

THE FORMULA: START WITH BREAKEVEN

Your breakeven point is where you’re not making or losing money. It’s the foundation for understanding what your target CPA (cost per acquisition) should be.

Here’s the simple formula:

Average Order Value – Cost of Goods Sold = Breakeven CPA 

Let’s break that down:

•  Average Order Value (AOV): This is how much a customer spends, on average, when they buy from you.
•  Cost of Goods Sold (COGS): For physical products, this includes the cost to produce or source the item. For digital products like courses, this might include the cost of your tech stack, delivery, or your time if you're still personally involved in fulfillment.

👉 Breakeven CPA is the maximum you can spend to acquire a customer without losing money.

BUT YOU WANT TO MAKE A PROFIT, RIGHT?

Breakeven is just the starting line. You don’t want to work for free—you want to earn a profit.

So, once you know your breakeven CPA, you need to aim under it to leave room for profit.

Let’s say:

•  Your AOV is $200
•  Your COGS is $80
•  That means your breakeven CPA is $120

That’s the maximum you can pay to acquire a customer. But if you want to earn $40 profit per sale, your target CPA should be:

👉 $120 (breakeven) – $40 (desired profit) = $80 target CPA 

Now, you’ve got a clear benchmark to work with.

HOW TO USE THIS IN THE META ADS MANAGER

When reviewing your campaign results:

•  Look at your Cost Per Result (specifically, cost per purchase or cost per lead if you’re selling later).
•  Compare it to your target CPA.
•  If it’s below your target CPA—you’re making money 🎉 so keep that ad on!
•  If it’s above—you’re losing money 😬 tweak that ad or turn it off!

This clarity helps you make smart decisions like: 

•  Scaling ads that are working
•  Pausing or tweaking ones that aren’t
•  Adjusting pricing or upsells to increase your Average Order Value (AOV)

BONUS TIP: THE HIGHER THE AOV, THE EASIER IT IS TO WIN

If your breakeven CPA is too tight, Meta Ads might feel expensive. That’s where adding upsells, bundles, or tripwires can help to increase your AOV. The more a customer spends, the more room you have to acquire them profitably.

FINAL THOUGHTS

Profitable ads aren’t a guessing game. With a clear breakeven formula, you can run your Meta Ads with confidence, knowing exactly how much you can afford to spend to bring in a paying customer—and how much you’ll take home.

It’s simple math. And once you know your numbers, you’re in control.

Need help with your ad creative? Download our SWIPE file which includes our eight best performing Meta Ads examples that you can use to get inspired and remix your own.