ROAS in practice.
ROAS is handy for comparing across channels – Meta, Google, TikTok and Amazon can all be brought to a common denominator with it. What matters is the context: a „good" ROAS depends entirely on your margin. At a 20% margin a ROAS of 3 is a loss-maker, at a 60% margin the same figure is very profitable.
We'll explain it to you over the phone – no jargon and no sales pressure.
ROAS in the context of your margin.
ROAS answers a single question: how much revenue does one pound of ad budget bring in? At £1,000 of spend and £4,000 of revenue, the ROAS is 4.
What's decisive is the context: revenue is not profit. A ROAS of 4 means that, at a 20% contribution margin, £4,000 of revenue brings only £800 of contribution – so with £1,000 of ad costs that's a loss. At a 60% margin the same ROAS would be highly profitable.
That's why we always work with atarget ROAS derived from your actual margin – not with industry figures off the internet.
Improve ROAS.
On social channels the creative makes the biggest difference – not the bid.
Less wastage means a directly better ROAS.
Every percentage point of conversion feeds one-to-one into the ROAS.
Warm audiences almost always deliver the highest ROAS in the account.
A large share of supposedly poor campaigns are actually just poorly measured.
Bundles and upsells improve the ROAS without a penny more ad budget.
Common mistakes.
Averaging ROAS across all campaigns. Retargeting and new-customer acquisition aren't comparable.
Optimising only for a high ROAS. The highest ROAS usually comes at tiny reach – growth looks different.
Ignoring tracking gaps. Without the Conversions API a significant share of the data is missing.
Frequently asked questions about ROAS.
What is a good ROAS?
ROAS or ACoS?
Why do the platform and the shop differ from each other?
Let's talk about your project.
Request your no-obligation callback – we'll discuss your goals and tell you honestly whether and how we can help.
We will get back to you as soon as possible – usually the same working day.