Most marketers think they’ve got a handle on ROAS. They don’t.

It’s one of the most misunderstood metrics in paid media – and yet, it’s the one businesses obsess over the most. Open Meta Ads Manager or Google Ads, and you’ll see a shiny ROAS figure staring back at you. Looks impressive. But here’s the uncomfortable truth: it’s not telling you what you think it is.

That number you’re looking at? It’s an average. A mash-up of cold traffic, warm traffic, high-intent users, low-intent window shoppers, and time-decayed conversions all rolled into one. It blends someone who clicked yesterday with someone who clicked 29 days ago. The result? A misleading stat that leads to poor decisions.

What You Really Need Is Cohorted ROAS

If you’re still making decisions based on platform-reported ROAS, you’re flying blind.

Instead of lumping everyone together, you need to analyse performance by cohort. That means tracking ROAS based on when a user first engaged with your brand. Day 1, Day 3, Day 7, Day 14, Day 30 – these milestones matter.

Let’s say you discover this pattern in your data:

• Users who hit 40% ROAS by Day 3 consistently reach 120%+ by Day 30
• But users who only reach 30% ROAS by Day 3 rarely break 70% by Day 30

With this level of insight, you can spot the winners early and scale with confidence. No more waiting 30 days for performance to play out. No more holding on to ad sets that are doomed from the start.

App Marketers Already Know This

This kind of analysis is standard in the mobile app world. App marketers live and breathe cohort data – whether it’s LTV curves, retention, or payback periods. They optimise based on how value accrues over time.

But outside of that space, most marketers are still stuck in legacy metrics:

• “Total revenue divided by total ad spend”
• Meta’s 7-day click attribution
• Google’s 30 to 90-day conversion windows

These might give you a surface-level snapshot, but they don’t show you the trajectory of value. They can’t tell you who is scaling profitably and who isn’t. That’s a dangerous blind spot.

For SaaS? ROAS Is Practically Useless

If you’re running paid ads for a SaaS brand, relying on ROAS is not just misleading – it’s a mistake.

Here’s why: let’s say you’re acquiring customers at £200 each. Those customers are worth £5,000 over the next year. But Google and Meta will only show you the immediate MRR – maybe £200, if that.

If you’re optimising for short-term ROAS, you’re undervaluing your acquisition strategy by a mile. You could kill campaigns that are actually performing brilliantly on a long-term basis.

Instead, you should be laser-focused on:

• CAC (Customer Acquisition Cost)
• LTV (Customer Lifetime Value)
• Payback period

These are the metrics that give you a true sense of how sustainable and scalable your campaigns are. Not some front-loaded ROAS figure inside Ads Manager.

The Smarter Way to Scale

Here’s the bottom line: platform-reported ROAS is a vanity metric. It makes you feel in control, but it’s built on murky attribution windows and mixed-intent traffic. If you’re serious about scaling profitably, you need to shift how you measure success.

Start by:

• Tracking ROAS by cohort: D1, D3, D7, D30
• Building predictive models based on early ROAS indicators
• Prioritising CAC, LTV, and payback when making decisions

It’s not as neat and tidy as plugging in to Google Ads and reading a number off the dashboard. But it’s how you make better decisions, faster. And that’s what separates the brands that grow from the ones that guess.