There is no single right value; it depends on your gross margin. At a 40 per cent margin, the break-even point for ad spend is a ROAS of 2.5. Calculate your own break-even rather than looking at sector averages.

Should I track ROAS or ROI?

ROAS only accounts for ad spend. Once product cost, shipping and return rates are included the picture changes. Use a profit-based measure for decisions and ROAS for day-to-day optimisation.

Should I stop brand campaigns?

Measure first. Pause for a week and watch organic traffic. If the loss is small, moving that budget to new customer acquisition is usually more efficient.

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Growth MarketingGuide18 July 20266 min read

Reading ROAS properly: when a good-looking campaign is a bad one

ROAS reduces the return on ad spend to a single number. The same thing that makes it useful makes it dangerous: it hides a lot.

Why high ROAS can be a bad target

The easiest way to raise a campaign's ROAS is to cut the budget. You advertise only to the audience that already knows you and searches for your brand; conversion is high, cost is low, the number shines. But that audience was coming anyway.

So ROAS can rise while total sales fall. What looks like success in the dashboard can be contraction at the till. This is why ROAS should always be read alongside total revenue and new customer count.

The brand search trap

An ad shown to someone searching your brand name almost always produces high ROAS. But most of those people would have reached your site without the ad. Part of that spend is not a real gain; it is a cost written on top of a sale that was already going to happen.

Measuring it is simple: pause the brand campaign for a week and watch organic traffic. If organic sales absorb most of the paid sales, that budget will do more good elsewhere.

The attribution window

ROAS measured in a seven-day window and in a thirty-day window looks very different for the same campaign. For products with a long decision cycle, a short window makes the upper funnel look unfairly bad. The result: campaigns that grow the brand get switched off, and only harvesting campaigns survive.

Choose the window based on your product's real purchase cycle. For a product with a ten-day average decision time, a seven-day window misleads systematically.

What to measure

You do not need to abandon ROAS; you need to put a few numbers beside it. Read together, the five below show whether a campaign is actually producing growth.

Total revenue: if ROAS rises while revenue falls, the budget has been cut too far
New customer share: how much of your sales comes from first-time buyers
New customer acquisition cost: spend divided by new customers only
Non-brand ROAS: what remains once brand searches are excluded
Customer lifetime value: you may lose on the first order and profit on the third

A practical rule

Before switching a campaign off, ask: if this stops, what percentage of its sales still arrive through another channel? If the answer is high, the campaign looks valuable but is not creating value. If it is low, that campaign is the engine of growth even at a lower ROAS.

Frequently asked

What is a good ROAS?: There is no single right value; it depends on your gross margin. At a 40 per cent margin, the break-even point for ad spend is a ROAS of 2.5. Calculate your own break-even rather than looking at sector averages.
Should I track ROAS or ROI?: ROAS only accounts for ad spend. Once product cost, shipping and return rates are included the picture changes. Use a profit-based measure for decisions and ROAS for day-to-day optimisation.
Should I stop brand campaigns?: Measure first. Pause for a week and watch organic traffic. If the loss is small, moving that budget to new customer acquisition is usually more efficient.