Nearly every advertising report ever produced includes a line for return on ad spend (ROAS). Often, it’s used as the top-line indicator of ad effectiveness. The unfortunate truth is that ROAS is a commonly misused or incomplete metric.
It’s my sense that many advertisers already understand these flaws yet will not admit it. Why? Because they began believing a different story when their incentives were misaligned. If not properly framed, ROAS is set up to pour increasingly more money into the pockets of advertisers, even if your ads aren’t actually producing a true return.
So, what can be done, and how did we get here in the first place?
