Is your company still obsessed with ROAS? You're not alone. But what happens when that single metric becomes a roadblock to real growth?

I recently connected with several retail media leaders to ask them about those pivotal "aha moments" when they successfully shifted their organizations away from ROAS tunnel vision.

If you've ever tried explaining why targeting existing customers isn't the best use of your ad dollars, today's edition is packed with real-world ammunition for your next internal meeting.

Don't forget that you can listen to these conversations unfold in audio form by tuning into the podcast! Retail Media Breakfast Club can be found in your favorite podcast app as well as on Youtube.

When Good ROAS Is Actually Bad News

Nem Lazic, E-commerce Channel Manager at healthy soda brand Zevia, perfectly captures the ROAS paradox: "It's a double-edged sword. If the ROAS is too low, you kind of get those questions of 'why are we doing this again?' If it's too high, I know that I've wasted money somewhere."

This insight cuts to the heart of the issue. A sky-high ROAS often means you're simply preaching to the choir—targeting people who already know and love your brand. As Lazic puts it: "We don't need to tell our customers we're great. They know that—that's why they're our customers. We need to tell other people we're great."

When you're consistently hitting 20x ROAS, chances are you're serving ads to existing shoppers. "I hate to say it's a waste of dollars because we love our customers," Lazic explains, "but you don't have to try to win them over when there's a vast pool of people that have never heard of you that could probably use that ad spend."

The New Brand Challenge

For emerging brands, the ROAS obsession can be particularly damaging. Justin Bomberowitz, Director of E-commerce at WILDE Brands, shares how his relatively new brand navigates this challenge.

"We're a chicken snack, a chip that crunches like potato chips. But we're keto friendly and we have 13 grams of protein," Bomberowitz explains. "When someone sees us, they see us either as potentially jerky or maybe like a potato chip or maybe like a pork rind. And so there's a lot of education there."

For Wilde Brands, branded search terms deliver impressive ROAS metrics: "If you look at the name of our brand, it's Wilde W-I-L-D-E. Organically that kind of indexes itself, it does quite well and we have a nice brand block. So CPCs are cheap." But Bomberowitz recognizes that true growth comes from elsewhere: "I want those that are looking for protein chips or keto snacks or healthier versions of snacks, and that naturally is more expensive and that's gonna lower my return on ad spend, but I'm trying to make the pond bigger and add more fish."

When Lower ROAS Means Better Business

Jamie Roller, Director of Marketplaces at Dr. Squatch, shares a compelling case study of successfully moving beyond ROAS fixation. When her team shifted to a new advertising approach with a new vendor, they made a bold move: transitioning from majority branded to majority unbranded keywords.

The immediate result? "Naturally our ROAS went down, but our TACoS also went down and our top line sales were significantly up." This clear demonstration of value made it "obvious to all of us that ROAS alone isn't the right place to focus and that we should really be tracking total top line growth."

The Bottom Line

ROAS remains a useful efficiency metric, but treating it as the ultimate measure of success can severely limit your growth potential. Whether you're an established brand trying to expand your customer base or a newcomer educating the market about your offering, sometimes the most valuable advertising investments are precisely those that don't deliver the highest short-term ROAS.