THE ROAS ILLUSION: RETHINKING WHAT GOOGLE ADS SUCCESS LOOKS LIKE

Summary from the TLDR Marketing newsletter

A skincare brand reporting 600% ROAS may still be unprofitable if its best-selling product only has a 10% margin, once costs like shipping, returns, and marketing are factored in. ROAS favors short-term tactics like branded search and retargeting, which often capture conversions that would have happened anyway. The article proposes profit per impression (PPI) for top-of-funnel measurement, customer lifetime value (CLV) to optimize for high-retention users, and incrementality testing to isolate true ad-driven lift.