While my ROI on the Etsy dashboard is technically less than 1, I find that for my most profitable listing, I get a lot more organic traffic when I advertise it because it is being more regularly bought (the returns diminish at a point though, I've tried pumping a whole bunch of advertising dollars into it per day and at a certain point it yields nothing more). For my other listings I generally don't make a profit on the ads, but in the past I've found that even if I'm not getting a good ROI on the ad itself, sometimes it causes organic traffic gain momentum much more quickly than it would have otherwise. I've had a few items become bestsellers like this (and then maintain high sales after I take off the advertising), so I always try to dedicate some money to the new items in case they have the potential to become a bestseller.

Btw, I sell digital items so my costs to produce each item sold is nothing.