This episode challenges the conventional wisdom of high ROAS (Return on Ad Spend) as the ultimate metric for ecommerce success. It argues that an overemphasis on high ROAS can actually kill a brand's growth and profitability by limiting customer acquisition and obscuring true business health. Ecommerce operators should instead focus on a blended new customer ROAS (AMER) derived from overall profitability goals, considering LTV and cost centers.
Here’s a tough pill to swallow — chasing a high ROAS might actually be costing you growth and customers.Over the last few months, we’ve been deep in the weeds with brands trying to “beat” their ROAS targets, only to realize they’re leaving massive opportunities on the table by focusing on the wrong metric.In this episode, we’re tearing down the myth that higher ROAS is always better. Instead, we show why the smartest brands are going after the lowest sustainable new customer ROAS to dominate ad auctions, outbid competitors, and drive real profitability.This isn’t guesswork. We share real client examples where dialing down the ROAS target, backed by strong retention and lifetime value, created insane competitive advantages.Ready to rethink your ROAS strategy and win the auction? Let’s dive in.Key Takeaways:00:00 Intro00:42 Defining Acquisition Media Efficiency Ratio (aMER)01:48 Critique of chasing high ROAS benchmarks04:24 Winning ad auctions with lower bids07:39 Importance of aligning aMER with profitability goals10:03 Role of retention and LTV in lowering aMER targets11:37 Common client misconceptions about ROAS and profitability14:58 Business model impact on aMER targets17:29 Profitability targets affect acquisition strategy18:37 Why agencies must integrate forecasting and LTV knowledge20:40 OutroAdditional Resources:👉 Grow Your Bottom Line: https://www.kynship.co/?utm_source=podcast&utm_medium=audio&utm_campaign=68👉 Unlock Our FREE $10M Masterclass: https://www.kynship.co/free?utm_source=podcast&