If you’re running Google Ads for your ecommerce brand, there’s one metric that tends to steal the spotlight:
ROAS – Return on Ad Spend.
But here’s the thing: not all ROAS is good ROAS. And sometimes, a “decent” ROAS is quietly killing your profit margin.
In this guide, we’ll break down:
- What ROAS really means for ecommerce
- How to spot when your ROAS is misleading
- What a good ROAS looks like in 2025
- How to fix low-performing campaigns without burning budget
Let’s make your paid search smarter.
Table of Contents for How to Spot a Bad Google Ads ROAS (And What to Do About It)
What Is ROAS (And Why Do Ecommerce Brands Obsess Over It)?
ROAS = Revenue from Ads / Cost of Ads
So if you spend £1,000 and make £5,000 in revenue, your ROAS is 5.0 (or 500%).
Seems simple. But revenue isn’t profit – and ROAS doesn’t factor in:
- Product margins
- Shipping costs
- Discounts & returns
- Platform fees
- LTV (Customer Lifetime Value)
A 4.0 ROAS might be amazing for a high-margin beauty brand … and disastrous for a low-margin electronics store.
Need help auditing your numbers? Our Paid Media services include full-funnel ROAS analysis – and we’ve seen it save brands thousands.
Signs Your Google Ads ROAS Is Misleading
1. Your ROAS Looks Healthy – But Profits Are Shrinking
This usually means you’re:
- Scaling low-margin products
- Over-discounting
- Paying too much per click in competitive auctions
Fix it: Analyse product-level ROAS in Google Ads reports and focus spend on SKUs with the strongest net margins.
2. Your ROAS Is Great on Branded Campaigns Only
Branded search (e.g. “Your Brand Name”) almost always performs well. But it doesn’t grow your business – it captures existing demand.
Fix it: Separate branded and non-branded campaigns. Assess ROAS without branded skew.
3. You Have High ROAS, but Low LTV
You might be attracting one-time buyers who never return.
Fix it: Check post-purchase retention in GA4 and Klaviyo. Consider layering email marketing and retention strategy into the funnel.
4. Your Smart Shopping or PMax Campaigns Are Cannibalising Organic
Google’s Smart Shopping and Performance Max are black boxes. They can drive ROAS – but often by hijacking sales you would’ve had anyway.
Fix it: Use Search Console and analytics to monitor changes in organic traffic. Consider splitting campaigns by intent and product category.
What’s a Good ROAS in 2025?
Here’s a rough benchmark for ecommerce:
| Vertical | Target ROAS |
|---|---|
| Fashion / Apparel | 3.5–5.0 |
| Health & Beauty | 4.0–6.0 |
| Electronics | 2.5–4.0 |
| Homeware | 3.0–5.0 |
| Supplements / Consumables | 5.0–8.0 |
But again – ROAS targets only work if you know your margins.
How to Improve Low ROAS (Without Panic)
1. Segment Campaigns More Intelligently
Group by:
- Product margin
- Purchase frequency
- Customer LTV
Then optimise bids and creative accordingly.
2. Fix Your Landing Pages
Poor CRO will tank even the best-targeted ads. Use Hotjar or VWO to diagnose leaks, and read our CRO tips to plug them.
3. Use First-Party Data to Build Smarter Audiences
Your CRM and email lists can feed into Google Ads for:
- Lookalike audiences
- Suppression lists (e.g. exclude recent buyers)
- High LTV customer retargeting
4. Adjust Attribution Windows
Default attribution may under-report long-consideration purchases. Adjust to 7, 14 or 30 days depending on your buying cycle.
Bonus: Don’t Forget About Blended ROAS
Blended ROAS = Revenue from all sources / Total marketing spend
It tells a more accurate story – especially when multiple channels (email, organic, affiliate) assist in the sale.
This is why we always integrate Analytics & Reporting alongside Google Ads management.
Final Thought on How to Spot a Bad Google Ads ROAS
Google Ads ROAS can be your best friend – or your biggest blind spot.
Look beyond surface numbers. Understand your margins. Monitor cross-channel attribution. And if you’re not sure where the leaks are?
Let us run a full audit via our Paid Media Consultancy
Or book a free discovery call and we’ll help you turn ROAS into revenue
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