🏭 Industry
One of the biggest things that influences your ROAS is the industry you’re in.
Some industries, like automotive and sporting goods, tend to get higher returns because customers are willing to spend more and profit margins are larger. Others, like apparel, often face more competition and lower margins, which can make hitting high ROAS harder.
The takeaway? Don’t compare your numbers to a totally different industry. Use industry-specific ROAS benchmarks to see how you stack up, and adjust your goals based on what’s normal for your niche.
One of the biggest things that influences your ROAS is the industry you’re in.
Some industries, like automotive and sporting goods, tend to get higher returns because customers are willing to spend more and profit margins are larger. Others, like apparel, often face more competition and lower margins, which can make hitting high ROAS harder.
The takeaway? Don’t compare your numbers to a totally different industry. Use industry-specific ROAS benchmarks to see how you stack up, and adjust your goals based on what’s normal for your niche.
💰 Product Margins
Your product margins have a huge impact on what’s considered a “good” ROAS.
If you sell high-margin products, you can still make a healthy profit with a lower ROAS. But if your margins are slim, you’ll need a higher ROAS just to break even.
That’s why it’s so important to know your breakeven ROAS before you set any goals. Simply put, that’s the ROAS you need to cover your costs without losing money. Once you know it, you can set realistic targets that actually work for your business model.
Your product margins have a huge impact on what’s considered a “good” ROAS.
If you sell high-margin products, you can still make a healthy profit with a lower ROAS. But if your margins are slim, you’ll need a higher ROAS just to break even.
That’s why it’s so important to know your breakeven ROAS before you set any goals. Simply put, that’s the ROAS you need to cover your costs without losing money. Once you know it, you can set realistic targets that actually work for your business model.
🎯 Business Goals
Your business goals shape what a “good” ROAS looks like for you.
If you’re a growth-first startup, you might accept a lower ROAS in the short term. That’s because your focus is on customer acquisition and building brand awareness, not immediate profits. On the other hand, established brands often aim for a higher ROAS. Their priority is protecting profitability and making sure every ad dollar drives measurable returns.
Think about your stage of growth and your long-term strategy. The “right” ROAS for your business should match both.
Your business goals shape what a “good” ROAS looks like for you.
If you’re a growth-first startup, you might accept a lower ROAS in the short term. That’s because your focus is on customer acquisition and building brand awareness, not immediate profits. On the other hand, established brands often aim for a higher ROAS. Their priority is protecting profitability and making sure every ad dollar drives measurable returns.
Think about your stage of growth and your long-term strategy. The “right” ROAS for your business should match both.
⚔️ Competitive Landscape
The level of competition in your market can make or break your ROAS.
In saturated markets, ad costs climb fast. More advertisers are bidding for the same audience, which makes it harder to keep a high ROAS.
To win in these conditions, you need sharper targeting and better creative. That means finding ways to stand out in the feed, connect with your audience quickly, and give them a reason to click on your ad instead of someone else’s.
The level of competition in your market can make or break your ROAS.
In saturated markets, ad costs climb fast. More advertisers are bidding for the same audience, which makes it harder to keep a high ROAS.
To win in these conditions, you need sharper targeting and better creative. That means finding ways to stand out in the feed, connect with your audience quickly, and give them a reason to click on your ad instead of someone else’s.
📌 Key Takeaways
- ✅ A “good” ROAS isn’t the same for every business. It depends on your product margins, business goals, and competitive market.
- ✅ For most e-commerce brands, 4:1 ROAS is a strong and scalable target.
- ✅ Always know your breakeven ROAS and customer lifetime value (LTV) before setting benchmarks.
- ✅ Combine precise targeting, high-quality creative, and rigorous testing to outperform industry averages.
- ✅ Brands that consistently analyze and optimize can push past average ROAS and grow profitably at scale.