ROAS expresses how many euros of revenue one euro spent on advertising brings in; ACoS is its inverted view, showing what share of turnover advertising costs make up. Both indicators share the same weakness: they work with revenue, not margin. A campaign with a high ROAS on a low-margin product can be loss-making, while a lower value on a high-margin product can be profitable. Meaningful management is therefore based on a threshold value calculated from one's own margin, not on industry recommendations. The second limitation is attribution – the values differ depending on which attribution model is used, and advertising platforms' own systems often assign credit in their own way. Only an experiment can verify the actual benefit.
See also: Incrementality, Attribution models, Margin and discount promotions.
