Beyond ROAS: how to elevate your digital marketing strategy

Return on ad spend (ROAS) is a core performance metric for digital marketers, but treating it as the only measure of success can hold your strategy back. To drive sustainable growth, you need to understand what ROAS can and cannot tell you, set flexible targets, and connect it to wider commercial and brand outcomes.

What is ROAS and how do you calculate it?

ROAS (return on advertising spend) shows how much revenue you generate for every unit of currency spent on advertising. It is calculated by dividing advertising-generated revenue by the cost of the ad campaign.

For example, if you spend £10,000 on ads and generate £40,000 in attributed revenue, your ROAS is 4:1 (or 400%). This gives a clear snapshot of efficiency, but it is only one part of the performance picture.

Why is ROAS not enough on its own?

ROAS focuses on immediate, trackable revenue. It does not capture longer-term value such as brand awareness, word-of-mouth, or customer lifetime value.

A campaign with modest short-term ROAS might still be valuable if it attracts high-quality customers who buy repeatedly. Equally, an excellent ROAS on low-margin or one-off purchases may contribute little to overall profitability. That is why ROAS should be read alongside broader business metrics.

Why should ROAS targets be dynamic?

Digital markets move quickly. Costs, competition, consumer behaviour and channel performance can all change in a matter of weeks.

If your ROAS target stays fixed while these inputs shift, your strategy can drift out of line with reality. Dynamic ROAS targets that are reviewed and adjusted regularly help ensure your goals remain achievable and aligned with current trading conditions and growth ambitions.

How should you adjust ROAS targets for costs and market conditions?

ROAS targets should reflect changes in cost of goods sold (COGS), pricing, discounting and media costs. When COGS rise or prices fall, you may need a higher ROAS to maintain the same profit. When your margins improve, you may afford a lower ROAS in exchange for faster growth.

Regularly revisiting ROAS thresholds by category or campaign, using up-to-date financial data, keeps your marketing activity financially sound even as the market moves.

Why is a single ROAS target risky across your product range?

Using one ROAS target for all products ignores the reality that margins, price points and roles in the portfolio vary widely. High-margin products could be under-funded because they easily exceed the global target, while low-margin lines might soak up budget without delivering real profit.

This one-size-fits-all approach can hide underperformance in some areas and over-performance in others, making it harder to allocate spend where it creates the most value.

How can you tailor ROAS to different products?

A smarter approach is to set differentiated ROAS targets based on product attributes, such as margin, lifecycle stage, strategic importance and competitive position.

For example, you might accept lower ROAS on hero or entry products that drive new customer acquisition, while demanding higher ROAS on mature, high-margin lines. Segmenting your product portfolio and matching ROAS targets to each group leads to more efficient and profitable budget allocation.

How can advanced analytics enhance your ROAS strategy?

Advanced analytics allow you to look beyond headline ROAS and understand the drivers behind it. By combining ROAS with customer acquisition cost, lifetime value, incrementality and cohort performance, you can see which campaigns and products truly move the needle.

This deeper analysis helps you avoid over-optimising for cheap clicks or short-term wins, and instead back activity that grows profitable revenue and strengthens your brand over time.

Which wider marketing metrics should you pair with ROAS?

To get a balanced view of performance, ROAS should be paired with metrics such as:

• Conversion rate and average order value

• Customer engagement (click-through rates, time on site, repeat visit rates)

• Brand indicators (search interest, direct traffic, brand uplift studies)

• Retention and repeat purchase rates

Viewed together, these metrics show how advertising contributes to both immediate sales and long-term brand and customer value.

How can cross-functional alignment make ROAS more effective?

ROAS targets work best when marketing, finance and sales agree what “good” looks like. Finance teams bring clarity on margins and profit, sales teams add trading priorities, and marketing teams translate these into channel and campaign plans.

Cross-functional collaboration ensures ROAS thresholds are realistic, commercially meaningful and supportive of wider business goals, rather than arbitrary numbers set in isolation.

How should you reframe ROAS within a broader strategic framework?

ROAS should be treated as an important, but not exclusive, measure of digital success. Elevating your strategy means:

• Recognising the limitations of ROAS as a single metric

• Reviewing and adjusting ROAS targets regularly

• Differentiating ROAS by product, category and objective

• Integrating advanced analytics and broader marketing metrics

• Aligning targets with cross-functional business priorities

When ROAS sits within this wider framework, it becomes a powerful tool to guide smarter decisions, rather than a narrow target that constrains growth.

If you want to see how adaptive AI can help you set dynamic, product-level ROAS targets and optimise campaigns automatically, visit upp.ai to learn more and speak with the team.