CM3 ROAS measures how much contribution margin (after marketing) you earn for every dollar spent on advertising.
CM3 ROAS = CM3 ÷ Ad Spend
| Metric | Definition |
|---|
| CM3 (Contribution Margin) | Profit after COGS, fulfillment, and marketing |
| Ad Spend | Total advertising spend across platforms |
| Metadata | |
|---|
| Type | Multiplier |
| Data Source | Shopify, Meta Ads, Google Ads |
| Aggregation | Ratio |
Example
Your Shopify store has $42,500 CM3 and spent $25,000 on advertising.
| Component | Value | Calculation |
|---|
| CM3 | $42,500 | Contribution margin |
| Ad Spend | $25,000 | Advertising cost |
| CM3 ROAS | 1.7x | $42,500 ÷ $25,000 |
How It Works
CM3 ROAS shows how much contribution margin your advertising generates after all variable and marketing costs. A 1.7x CM3 ROAS means every ad dollar produces $1.70 in contribution margin—profit available to cover fixed costs.
When to Use
| Scenario | Action |
|---|
| Measuring true ad profitability | CM3 ROAS shows margin after marketing costs |
| Setting efficiency targets | CM3 ROAS > 1x means positive contribution margin |
| Campaign optimization | Focus on campaigns with highest CM3 ROAS |
| Profitability modeling | Use CM3 ROAS for break-even analysis |
| Metric | Relationship |
|---|
| CM2 ROAS | Variable margin per ad dollar |
| CM4 ROAS | Operating profit per ad dollar |
| ROAS | Revenue per ad dollar |
