The Target ROAS Trap: When Optimising for the Wrong Number Kills Growth

Picture this: You're staring at your Google Ads dashboard, and there it is: that beautiful 8x ROAS number glowing like a beacon of marketing excellence. You screenshot it, maybe even frame it. Your boss is happy. Your agency is patting themselves on the back. But here's the plot twist nobody talks about: your business hasn't grown an inch in six months.

Welcome to the Target ROAS trap, where chasing the wrong number doesn't just waste your time: it actively suffocates your growth potential.

The Vanity Metric That's Killing Your Business

ROAS (Return on Ad Spend) has become the golden child of eCommerce metrics, and frankly, it's getting a bit embarrassing. Every founder I meet leads with their ROAS numbers like they're announcing lottery winnings. "We're hitting 6x ROAS!" they beam, whilst their monthly revenue sits stubbornly flat.

Here's the uncomfortable truth: ROAS only tells you how much revenue you generated per pound spent on ads. That's it. It doesn't tell you if those sales were profitable after fulfillment costs. It doesn't reveal whether you're acquiring new customers or just recycling the same ones. It certainly doesn't indicate whether your business is actually growing.

Think of ROAS like judging a restaurant solely on how busy it looks. Sure, packed tables seem impressive, but what if everyone's just ordering tap water and sharing a single starter? High activity, zero profit.

Why High ROAS Keeps You Trapped in Mediocrity

The most dangerous thing about obsessing over ROAS is how it rewards playing it safe. When your primary goal is maintaining those pretty numbers, you naturally gravitate toward the most predictable wins:

The Retargeting Comfort Zone: Your highest ROAS campaigns are probably retargeting past customers. These people already know and trust you, so they convert easily. Fantastic for your ROAS dashboard, terrible for customer acquisition. You're essentially high-fiving yourself for selling to people who were already going to buy.

The Tiny Budget Problem: It's much easier to maintain high ROAS with small budgets. Spend £100 and hit 8x ROAS? Brilliant! Try spending £10,000 and maintaining that same ratio. Suddenly you're discovering that your "winning" campaigns don't actually scale because they were only reaching a tiny, highly qualified audience.

The Innovation Killer: When ROAS is king, you avoid testing new audiences, creative angles, or channels. Why risk dropping your precious 6x ROAS to test something unproven? This mindset keeps you locked in local maximums: you're optimising within artificial constraints rather than growing the business.

I've seen brands spend two years "optimising" their ROAS from 4x to 6x whilst their competitors doubled their market share by investing in brand awareness and customer acquisition at temporarily lower ratios.

When Low ROAS Actually Signals Smart Investment

Here's where things get interesting: some of your lowest ROAS periods might represent your smartest business decisions. Let me share a story that'll make you question everything.

A pet product brand we worked with started with ROAS hovering around 1-1.5x during their first two months. Their competitors were probably laughing at these "amateur" numbers. But instead of panicking and cutting budgets, they doubled down on creative testing, built robust email flows, and focused obsessively on customer retention.

The result? After 24 months, they were averaging 2-2.5x ROAS whilst enjoying massive brand awareness and customers with lifetime values that made their competitors weep. Their "ugly" early ROAS was actually the runway for sustainable growth.

Compare this to brands that maintain pristine 8x ROAS by only targeting their existing customer base with discount codes. Sure, the numbers look great in your weekly reports, but you're essentially running a very expensive loyalty programme, not a growth engine.

The Smart Bidding Illusion

Google's Target ROAS bidding adds another layer of complexity to this trap. The algorithm looks at your historical performance and tries to hit your target whilst considering recent data more heavily. This creates some fascinating scenarios:

If your actual ROAS is 537% and you change your target from 500% to 600%, Smart Bidding might seem completely unresponsive. Why? Because you're already performing within an acceptable range of your historical average. The algorithm isn't broken: it's just not as impressed with your target changes as you are.

Moreover, Google's system weighs the last 7 days super heavily, the last 28 days moderately, and everything before that barely matters. This recency bias means small changes can have huge effects whilst big strategic shifts sometimes produce no response, depending on timing.

Breaking Free: What Actually Matters

Here's the liberating truth: your campaigns should be judged by what happens next: profit, scale, and customer value: not by a single ratio on your dashboard.

Profit on Ad Spend (POAS): Instead of revenue return, focus on profit return. A 3x ROAS campaign with 40% margins delivers 1.2x profit return. A 2x ROAS campaign with 60% margins delivers 1.2x profit return. Same profitability, very different ROAS numbers.

Customer Lifetime Value: That "expensive" new customer acquisition campaign with 1.8x ROAS might be your best investment if those customers have high retention rates and strong repeat purchase behaviour.

Incremental Growth: The most important question isn't "What was our ROAS?" but "What growth happened that wouldn't have occurred without our advertising?" This requires proper measurement and often reveals that your highest ROAS campaigns are simply capturing sales that would have happened anyway.

The Growth-Focused Alternative

Smart brands approach PPC with a portfolio mentality. They run:

• Foundation campaigns with proven ROAS for baseline performance

• Growth campaigns that accept lower ROAS for customer acquisition

• Brand building initiatives that may show minimal direct attribution but build long-term value

• Testing campaigns that sacrifice efficiency for learning and innovation

This balanced approach means your blended ROAS might look less impressive in isolation, but your business actually grows month over month.

The Reality Check Your Business Needs

If you've been chasing ROAS targets whilst your revenue flatlines, it's time for an uncomfortable conversation. Ask yourself:

• When did you last acquire genuinely new customers at scale?

• What percentage of your "ROAS success" comes from remarketing to existing customers?

• How has your customer acquisition cost trended over the past year?

• Are you building brand awareness or just harvesting demand?

The brands that break through plateau moments aren't the ones with the prettiest ROAS numbers. They're the ones brave enough to invest in less efficient but more scalable growth strategies.

Your ROAS obsession isn't just limiting your growth: it's actively preventing it. The sooner you recognise that sustainable business growth requires temporary metric sacrifices, the sooner you can escape the trap that's keeping your competitors ahead.

Stop optimising for dashboards. Start optimising for actual business outcomes. Your future self will thank you, even if your current ROAS numbers need therapy.