Definition
ROAS is the central performance metric in paid media. It measures how much revenue an ad spend directly produces - separated from long-term brand effects or cross-channel contributions.
What counts as good ROAS depends entirely on margin. With 80% gross margin a ROAS of 2 is profitable acquisition. With 20% margin ROAS must exceed 6 or you lose money. Industry benchmarks without margin context are useless.
Biggest trap: looking at ROAS in isolation. Last-click attribution gives the final touchpoint 100% of the conversion - ignores awareness contributions, repeat visits, cross-device journeys. A modern ROAS view combines platform ROAS with real incrementality (hold-out tests, MMM).
Why it matters
ROAS is the only metric that defends performance budgets to a CFO. Without a ROAS dashboard you can't scale ad spend - every increase becomes a black box.
In practice
- 01E-commerce with established product: solid Meta-ads campaigns deliver ROAS 2.5-4.5; below that means optimisation needed.
- 02B2B LinkedIn ads: ROAS logic doesn't fit, use cost-per-lead instead (€80-250 industry-dependent).
- 03Premium brands: ROAS alone misleading - often brand searches after ad contact are the real conversion signal.
