ROAS is reported as a key performance metric in eCommerce. But fixating on ROAS without factoring margins into the equation can lead to profit losses - even with a high ROAS.
For example, this campaign had a 5 ROAS:
Calculator fields definitions:
Total Revenue of Campaign How much did your cart checkout as a result of the campaign?
Contribution Margin of Products After factoring in the costs of goods, warehousing, landing and any other costs, what percent of the revenue is profit? Note: it's okay to make educated guesses for this field if you don't have a good grasp on your costs.
Total Ad Spend of Campaign How much money did you spend on the campaign?
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