There’s a very specific type of marketer who gets excited about a 7x ROAS on $40 spend.
You’ve seen the post. A bar chart. A fire emoji. A “what a week” caption.
Here’s the thing: ROAS is one of the most abused metrics in performance marketing. And if you don’t understand why, you’re either being fooled—or worse, fooling yourself.
📉 Why This Metric Gets Misused
Let’s be clear. ROAS isn’t worthless. It has its place. But most of the time, it’s treated like gospel when it’s really just context-free math.
Return on Ad Spend = revenue divided by spend.
Sounds simple. Looks clean. Everyone wants to screenshot a “10x ROAS” and call it a win.
But here’s what ROAS doesn’t tell you:
- How much did you actually make?
- How much did you actually spend?
- How much margin is left after that flashy ratio?
If I told you I got a 5x ROAS, you’d probably be impressed. If I then told you I spent $20 and made $100, you’d roll your eyes. Because $100 revenue is irrelevant in any real business context. That’s not scale. That’s an accident.
And yet, most marketers stop at the ratio. No dollar signs. No context. Just vibes.
🚩 ROAS Is the Easiest Way to Hide a Weak Campaign
If someone only talks about ROAS, assume something else isn’t working.
ROAS is a shield. A narrative tool. A way to dress up bad fundamentals in nice typography.
You can:
- Spend very little and inflate your ROAS
- Target high-intent warm traffic and make ROAS look artificially high
- Ignore LTV, CAC, AOV, and all the actual business impact behind the scenes
And worse, you can hide behind ROAS when the actual revenue impact is negligible. A 10x on $100 spend is a joke. A 1.2x on $1M spend with repeat purchase upside might be a machine.
ROAS doesn’t tell you that.
🧠 What You Should Measure Instead
Here’s what we look at when we actually care about performance:
- Total Revenue Driven
Start here. ROAS without revenue is just a ratio in a vacuum. - Spend Efficiency
What are we getting at scale? Can we still maintain return as spend increases? - Contribution Margin
Gross profit matters. You can’t scale a 4x ROAS if your margin is 20%. - Blended KPIs
Paid media doesn’t exist in isolation. Look at CAC blended. Look at LTV/CAC. Look at retention. - Repeatability
Was this a one-hit campaign? Or a repeatable, scalable channel and creative combo?
A 2x ROAS on $500K with strong contribution margin and high retention is a better business decision than a 7x ROAS on $500 with no downstream revenue.
🔍 Why This Matters More Than Ever
Marketing teams are under pressure. Budgets are tight. Growth targets are steep. So it’s tempting to over-report on the one number that looks impressive.
But the danger is this: if you scale based on ROAS alone, you’ll miss the cracks until it’s too late.
We’ve seen it. Teams spend aggressively because “it’s still a 3x.” Then they realize they’re barely breaking even because margin disappeared, repeat rates dropped, or the “hero creative” stopped working once it hit cold audiences.
ROAS is a point-in-time snapshot. It’s not a strategy. It’s not a growth lever. It’s not even a complete performance metric unless you put it next to real dollars and real business outcomes.
🧭 What We Do at Produktiv
At Produktiv, we treat ROAS like a signal—not a goal.
We look at return with spend. Always. If someone reports “7x,” we immediately ask, “on how much?”
We don’t celebrate ratios until we’ve seen:
- Revenue impact
- Profitability
- Contribution to LTV
- Scalable potential
We map KPIs based on business context. A low-margin ecommerce product with high return rates shouldn’t chase the same numbers as a high-ticket SaaS funnel.
We run structured tests to understand:
- What scales
- What breaks when scaled
- What dies fast and should be buried faster
We’ve killed plenty of “high-ROAS” campaigns because they didn’t contribute to real growth. And we’ve scaled “average” ROAS campaigns that drove serious profit when paired with smart retention plays.
🪦 Final Takeaway: ROAS Is a Ratio, Not a Result
Don’t build your performance strategy around a metric that’s this easy to manipulate.
High ROAS doesn’t always mean success. But “10x” just sounds nice, so people keep posting it.
The real question isn’t “What’s your ROAS?” It’s “What’s behind it?”
Because growth doesn’t come from nice ratios. It comes from frameworks, testing, pressure-testing, and cutting what doesn’t work.
If ROAS is your headline metric, you’re not telling the full story. And if someone else is, dig deeper.
The numbers are only useful when they’re honest. And in this game, honesty scales.
