How ROAS works
ROAS — return on ad spend — is revenue divided by ad spend, the headline profitability number for paid traffic. A ROAS of 2.0 (or "2x") means every $1 of spend returned $2 of revenue. Because affiliates carry almost no overhead beyond ad spend, break-even sits near 1.0 — but you want a cushion above it for shaved conversions, refunds, and tracking gaps.
ROAS = revenue ÷ ad spend
Why max CPC is the number that matters
Knowing your ROAS after the fact is useful; knowing the most you can bid before the campaign is what keeps you profitable. Your value per click is your payout per conversion times your conversion rate — that's your EPC. Divide it by your target ROAS to get the highest CPC you can pay:
value per click = payout × conversion rate
max CPC = value per click ÷ target ROAS
Worked example
An offer pays $40 per conversion and you convert 3% of clicks, so each click is worth $40 × 0.03 = $1.20. To hit a 1.5x ROAS you can bid up to $1.20 ÷ 1.5 = $0.80 per click. Bid more than $0.80 and you'll undershoot your target; bid less and you beat it. That single number tells you whether a traffic source is even worth testing.