Why your ROAS is lying to you (and what to track instead)

ROAS — return on ad spend — is the most over-trusted number in marketing. It's not useless, but it answers a narrower question than most people think.

What ROAS actually measures

ROAS is attributed revenue ÷ ad spend. Two words there cause most of the trouble:

• Attributed — the platform claiming credit, often for sales it merely witnessed.
• Revenue — top-line, before COGS, shipping, returns, and fees.

A 5× ROAS on a product with 18% margin and a 12% return rate can still be unprofitable. The metric never sees the costs that decide whether you survive.

Three ways it misleads

1. Platform self-attribution. Meta and Google both claim the same conversion. Add their reported ROAS and you'll "earn" more revenue than you actually made.
2. It ignores margin. High ROAS on low-margin SKUs loses money at scale.
3. It rewards retargeting theatre. Retargeting shows gorgeous ROAS because it harvests demand other channels created.

The fix

Track blended ROAS (all revenue ÷ all spend) as a sanity check, and make decisions on contribution margin after acquisition cost. Use platform ROAS only to compare within a channel — never as the scorecard for the business.