If you’re running a growing ecommerce brand, you’ve probably celebrated a high ROAS at some point. Maybe it was a 6x Meta campaign, or your Google ads finally cracked an 8x. It felt like a win because it was a win, right?
Not necessarily.
High ROAS might make your marketing look good on paper, but it can be deceptive. In fact, the higher your ROAS climbs, the more likely it is that you’re leaving growth, and future profits on the table.
Let’s unpack why ROAS, while useful, is not the goal.The Problem with High ROAS
ROAS (Return on Ad Spend) is simple: it tells you how much revenue you’re generating per dollar spent. A 4x ROAS means $4 of revenue for every $1 in ad spend.
Sounds great. But here’s what it doesn’t tell you:
Here’s the trap:
High ROAS is often a sign that you're playing it safe.
You’re harvesting low-hanging fruit by retargeting existing buyers, relying on proven audiences, and minimizing spend to keep your ratio looking great.
But you’re also capping your growth. And worse, you’re building a business that looks efficient but isn’t expanding.
Let’s say you’re spending $20,000/month, and pulling in $160,000 in revenue (an 8x ROAS). Everyone’s happy.
But what if you spent $40,000, dropped to a 4x ROAS, and brought in $160,000 more revenue? You just doubled your customer base, and your future earnings. Your contribution margin might stay the same or even improve due to scale.
ROAS didn’t go up.
But your business did.
This is where most ecommerce founders get stuck. They’re optimizing for short-term efficiency, not long-term value.
You don’t build an 8-figure business by protecting ROAS. You build it by:
If your campaigns are profitable, your job isn’t to admire the ROAS. It’s to scale the spend.
Think like an investor, not a saver.
Leverage your working capital to grow future cash flow, not just to look good on a dashboard.
Too many brands treat high ROAS like a scoreboard.
But ROAS is not the prize. It’s a tool. A lever. Once you’re profitable, your goal is to pull that lever, even if your ratio goes down.
|
Scenario |
ROAS |
Ad Spend |
Revenue |
Contribution Margin |
New Customers |
|
High ROAS |
8x |
$20,000 |
$160,000 |
$76,000 |
2,133 |
|
Growth Play |
5x |
$38,000 |
$190,000 |
$76,000 |
2,533 |
|
Scale Play |
3x |
$95,000 |
$285,000 |
$76,000 |
3,800 |
Same profit, but up to 1,667 more customers.
More customers = more future revenue, more referrals, more momentum.
If you want to build a more valuable business, start measuring what actually drives long-term growth:
ROAS alone won’t answer these questions.
Protecting a high ROAS feels smart, like saving money in your personal life.
But businesses don’t grow by being frugal. They grow by deploying capital into customer acquisition that yields future returns.
Every month you underspend to protect ROAS is a month where your future pipeline shrinks.
The brands that win don’t obsess over efficiency. They master leverage.
They understand that ROAS is a starting point, and not just a destination. Once a campaign is working, the goal is to push it, test the limits, and scale smartly.
So next time you see a killer ROAS in your report, don’t pat yourself on the back just yet.
Ask yourself:
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