Return on Ad Spend Goal Setting
Return on Ad Spend Goal Setting
What it is: Return on Ad Spend (ROAS) Goal Setting defines the revenue target for each dollar spent on advertising. This metric drives campaign strategy, optimization priorities, and budget allocation. It’s one of the clearest indicators of ecommerce performance.
Why it matters for ecommerce merchants: If you’re not defining what success looks like, it’s hard to know if you’re winning. Setting ROAS targets aligns media strategy with bottom-line results. According to First Page Sage, the average ROAS for ecommerce sits at 2.05, setting your goal above that can unlock real revenue growth.
Common Benchmarks (#: Industry a. Average ROAS (PPC/SEM) b. Notes)
1. Eccomerce overall a. 2.0 – 4.0x b. Benchmarks vary by product margin and AOV
2. Fashion and Apparel a. 2.5 – 4.0x b. High competition, but strong visual creative can lift returns
3. Beauty and Cosmetics a. 3.0 – 5.0x b. High repeat-purchase behavior drives higher ROAS
4. Consumer Electronics a. 1.5 – 3.0x b. Competitive CPCs and longer consideration cycles
5. Home Improvement a. 2.0 – 3.5x b. Higher AOV can compensate for lower conversion rates
6. Health & Wellness a. 3.0 – 6.0x b. Niche targeting and strong retention improve ROAS
7. Luxury Goods a. 1.0 – 2.5x b. Lower volume and longer sales cycles but higher margin potential
8. Subscription/Recurring a. 1.5 – 3.0x (initial ROAS) b. CLTV is key, brands often accept low upfront ROAS for long-term gain
9. B2B SaaS a. 1.0 – 2.0x b. Long lead cycles; success is measured in MQL/CAC, not just revenue
10. Education/Online Courses a. 2.0 – 4.0x b. Performance often tied to seasonality and lead generation ROI
Challenges:
- Balancing aggressive goals with achievable performance thresholds
- Accounting for platform-specific performance averages
- Adjusting goals dynamically as market conditions shift
- Over-optimizing for ROAS at the expense of long-term brand equity
