Is Your High Google Ads ROAS Actually Hurting Your Profits?
Ever wonder if chasing that high ROAS target in Google Ads is actually helping your bottom line? It feels good to see big revenue numbers, but it doesn’t always tell the whole story about profit, does it?
The ROAS Trap: Revenue vs. Profit
Christine David recently explored this very problem, and frankly, it’s a conversation we need to have more often in digital marketing. She points out, quite rightly, that Return On Ad Spend (ROAS) can be a bit misleading. It just looks at revenue generated per ad dollar, not the actual profit margin on what you sold. You could hit a fantastic ROAS target selling low-profit items all day long, while ignoring higher-profit opportunities that might have a slightly lower ROAS. Ouch.
Connecting Ads to Real Business Results
What I appreciate about Christine David’s take is the push towards connecting ad performance to *real* business results. Are we driving leads that actually turn into valuable customers? Are we finding new customers or just selling more to existing ones? Are we building long-term value, or just getting short-term revenue bumps? She encourages looking deeper, perhaps focusing on profit data (if you can get it into Google Ads), tracking better quality leads, or even considering customer lifetime value.
Shifting the Mindset: Beyond Platform Metrics
It’s about shifting the mindset from just hitting an ad platform metric to truly understanding how your ad spend contributes to the overall health and growth of the business. It requires a bit more setup and thinking beyond the defaults, but isn’t that what smart marketing is all about? Making sure our efforts truly move the needle where it counts most…
Learn More
Find out more about how to make this shift for your own campaigns.
Source: David, Christine. Aligning Google Ads with Your True Business Objectives. Search Engine Journal. Read the full piece for deeper insights.