The Google Ads Podcast

Digital Marketing Basics Part 2: Understanding Return on Ad Spend (ROAS)

6 snips
Mar 28, 2025
Dive into the intriguing world of Return on Ad Spend (ROAS) and discover why it can be misleading if taken at face value. Learn how multi-touch attribution sheds light on true campaign performance and customer intent. The discussion reveals common pitfalls that marketers face when calculating ROAS and emphasizes the importance of a holistic approach to advertising metrics. Understanding these nuances can lead to better insights and ultimately, healthier business growth. Tune in for valuable strategies to enhance your digital marketing efforts!
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INSIGHT

ROAS Attribution Bias

  • ROAS numbers from platforms like Google or Facebook are often misleading because they attribute the entire conversion credit to themselves independently.
  • Multi-touch attribution is necessary to understand the real ROAS when multiple platforms influence the customer journey.
INSIGHT

Multi-Platform ROAS Inflation

  • When multiple platforms are involved in a conversion, each platform independently claims full credit, inflating ROAS numbers.
  • The actual return on ad spend is roughly divided among all platforms involved in the customer's journey.
ADVICE

Use ROAS as Baseline Only

  • Use in-platform ROAS as a baseline to detect performance changes but don't rely on it as the full picture.
  • Always track overall sales revenue and new versus returning customer ratios for true campaign insight.
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