Mercado Livre Ads (Product Ads) in 2026: how it works, target ROAS, and how much to invest without losing money

Mercado Livre Ads (Product Ads) puts your listing at the top of search results and on other product pages, and you pay per click. You set an average daily budget and, since January 2026, a target ROAS (sales generated ÷ ad spend), which replaced the old target ACOS. There’s one rule to avoid losing money: a product’s minimum ROAS is 1 divided by its margin before Ads. With a 25% margin, every sale from an ad costs you money below a 4x ROAS.

The advertising dashboard shows sales, clicks, and ROAS. It doesn’t show margin. That’s why so many campaigns that look "good" on the dashboard hurt your bottom line. Here’s how it works and how to set a target ROAS for each product based on profit.

#How Mercado Livre Ads works

• Pay per click. There’s no fixed fee. You pay when someone clicks, and never more than your budget. Cost per click varies by product price and category.
• Daily budget. You can start with R$ 1 per day. When you run out of budget for the day, your sponsored listings stop running until the next day.
• Where your listing appears. At the top of search results and within other sellers’ listings, marked "Sponsored." Real estate, Vehicles, and Services can’t use Ads.
• Auction. Listings rank higher when they combine a lower target ROAS (which allows for a higher bid) with greater listing relevance (quality and sales history).
• Requirements. The official requirements include a yellow reputation rating or higher, an account that’s been active for more than 7 days, at least 20 sales, and no overdue invoices.

Ad spend doesn’t appear in the "what you receive" amount for each sale. It shows up on your monthly bill along with everything else. That’s why it’s missing from the calculations of sellers who check margin order by order in their statement.

#ACOS or ROAS: what changed in 2026

Until 2025, you set a target ACOS (ad spend ÷ sales). Since January 2026, the system has used target ROAS (sales ÷ ad spend), and older campaigns were converted to the equivalent setting.

They’re the same calculation, just flipped:

A higher ROAS is more efficient. But keep in mind: in the auction, a lower target ROAS gives you more room to bid and more exposure. Lowering your target ROAS buys volume; raising it protects your margin.

#What ROAS do you need? The margin table

If a product's margin before ads is M, the ad breaks even when ACOS equals M—that is, when ROAS is 1 ÷ M. To keep a profit of L after ads, the maximum ACOS is M − L.

Two takeaways from this table. A product with a 15% margin can barely support ads: it needs a 20x ROAS to leave a 10% profit. And the ROAS suggested by the dashboard ("better than X% of competitors") doesn't know your margin; it could be below your break-even point.

Margin before ads is contribution margin: price minus commission, shipping, tax, cost, and packaging. I explain how to calculate it in profit margin: how to calculate it.

#Manual or automatic campaign?

Automatic. Mercado Livre picks the products with the most potential and manages the campaign every day. The first 7 days are for learning. You can pause it, but not delete it, and it won't use products already in a manual campaign.

Manual. You choose the listings (Mercado Livre recommends 15 to 30 per campaign, with similar prices and margins), set the average daily budget, and choose the target ROAS.

The official recommendation to group products by similar margin matters most, and almost no one follows it. If a campaign mixes products with 15% and 40% margins under a single 5x ROAS target, the 40% margin products are underfunded, while the 15% margin products are losing money.

Here's what I do:

1. Calculate each product's margin before ads.
2. Group them into ranges: below 20%, 20% to 30%, and above 30%.
3. Don't advertise products in the first range, or only do so with a very high ROAS.
4. Create one manual campaign per range, using the target ROAS calculated from the table above.

In practice. A seller of gym accessories had one automatic campaign with a 6x ROAS in the dashboard and thought it was doing great. When they broke it down by product, 11 of the 34 sponsored listings had margins below 16% and ROAS between 4x and 5x: every sale from those listings through ads lost money. The other 23 had margins above 30% and were underfunded. Splitting them into two campaigns and removing the 11 increased monthly profit without increasing ad spend.

#Direct and indirect sales, and TACOS

The dashboard separates sales from Ads (direct sales from the clicked product, and indirect sales from other products you sell that customers buy after clicking) from sales without Ads. Keep two things in mind:

• ROAS by listing, not just by campaign. The average hides which listings are profitable and which are losing money.
• Also check TACOS: ad spend divided by your store's total revenue, not just revenue from ads. It shows how much of your total revenue is going to advertising. I wrote about the difference in Good ACOS, bad profit.

Mercado Livre itself recommends keeping the campaign active for 30 days to stabilize before evaluating it.

#How much to invest

There's no one-size-fits-all budget in reais. Instead, follow this process:

1. Start with products that have margins above 25%.
2. Set the target ROAS based on each group's margin.
3. Give your budget enough time and volume to generate data (about 30 days).
4. Increase the budget only for groups where profit after ads is positive.

To do this, you need two numbers side by side: each product's ad spend and the actual margin on its sales. Mercado Livre provides the first; the second depends on your costs and taxes. Milewa brings them together: it pulls Mercado Ads spend for each listing, applies it to sales using the actual commission, shipping, cost, and tax, and shows profit after ads by product and campaign.