7 Common Commerce ROAS Myths
In recent years, largely due to the attribution available with Retail Media Networks, ROAS has become the default metric for measuring success. It’s a good start and lets you quickly understand sales impact, but this doesn’t show the whole picture and often won’t reflect total impact of your programs. As the core metric and one seemingly consistent across vendors, sometimes brands can place too much trust in ROAS and risk ignoring more telling metrics.
We’re not saying not to trust ROAS, but you must understand what it does or doesn’t capture, ensure your KPIs are aligned with the objective, trust that your results will improve with time & refinement, and review everything with your own sales data to confirm RMN reporting and calculate incrementality.
- ROAS is always the best way to evaluate performance
It’s a good guidepost, but ROAS is just one metric, and should only be the main KPI if a campaign is optimized for conversion. A solid ROAS is always nice to see, but if you need awareness and judge ROAS as the key, you may just be subsidizing your current sales and that will be reflected in results.
- ROAS should be judged at a tactical level
It’s important to understand which tactics work best, but even more crucial to explore how all elements of a campaign work together – especially at a retailer level. A true omni approach should lift performance across all tactics.
- Attributed ROAS is the most accurate way to evaluate a commerce program’s total impact
It’s the quickest and most readily available sales metric, but without looking at all tactics and your own sales data, there is a big risk of over (or under) estimating incrementality, or missing sales that were attributed to more than one tactic. Trade must also be part of the equation to truly understand how all levers are working together.
- All Commerce/RMN campaigns should be evaluated by ROAS
Retail media is evolving and is no longer always about conversion. While the data & direct integration makes immediate sales easier, more traditional media metrics matter for awareness, and retail media is becoming an increasingly important part of even the traditionally upper-funnel mix.
- ROAS is a consistent, comparable metric across vendors
ROAS provides a snapshot, but with different attribution models, look-back windows, and data availability, you must understand each methodology before comparing in any meaningful way.
- ROAS captures all sales impact
This goes along with understanding the different attribution models & campaign objectives. Beyond (mostly) untraceable cash transactions, 14 days may be a little long to measure the impact of a single exposure to a well-known brand. But 30 days will rarely be enough to measure the true impact on a new product.
- Organic optimization doesn’t impact ROAS
No matter how much you spend, if your content isn’t clear, complete, easy-to-understand (especially PDP headlines), and tailored to each algorithm, you risk abandoned carts & frustrating consumers. The positive impact of a good ad, that leads to a poor experience, is quickly forgotten. Your creative must also be tailored to each platform, retailer, and shopper motivations – the minor fee to create a new version will likely be offset by improved ROAS.
At Public Label we take pride in digesting the real meaning of ROAS, and understanding how it is reported. Is your brand looking to more accurately review results and consistently evaluate performance?
Reach out to discuss how we approach measurement and build holistic omni campaigns that focus on what matters most, whatever your objective.