Advertising and Measurement
Why can high ROAS still mean low profit?
Read advertising revenue alongside fees, discounts, returns and operating costs.
· Digital Department
What ROAS actually measures
ROAS divides revenue attributed to ads by ad spend. It does not subtract product cost, marketplace fees, shipping, discounts or returns, so it is not net profit. It can also vary with the attribution window.
Add order contribution
Review ad-driven orders by product and channel. Revenue boosted by discounts and free delivery can leave less contribution.
- Collected amount after discounts
- Product cost and channel fees
- Shipping, packaging and expected returns
- Ad cost and monthly overhead
Use both views to decide
ROAS can help compare creatives and channels. Increasing spend also requires positive order contribution and a view of total business profit. Reconcile ad reports with orders and accounting records.