Marketing & Agency
Should Advertising Agencies Optimize for ROAS or Profit?
An agency can influence ROAS directly through advertising. It cannot control every component of company profit. That is why the sensible answer is: use ROAS as an operating metric, but manage it inside a profit framework.
Why ROAS alone is incomplete
A campaign with 600% ROAS may sell low-margin products. Another at 350% may sell products with higher contribution and stronger repeat purchase.
If the agency is rewarded only for platform ROAS, it can be incentivized to protect easy branded or retargeting revenue instead of expanding profitable acquisition.
The client needs to provide business economics
Agencies need accurate information about:
- product margins
- shipping/fulfilment
- target contribution
- AOV
- refund rates
- new vs returning customer value
Without those inputs, “optimize for profit” becomes a slogan.
Use several layers
Campaign teams can manage CPA/ROAS daily. Weekly/monthly reporting should connect those results to new-customer volume, blended marketing efficiency and contribution where available.
The strongest agency relationship is not built around the prettiest Ads Manager screenshot. It is built around commercially useful growth.
Not sure what you should be getting?
If you want Meta and Google management that considers actual Shopify economics rather than platform ROAS alone, send us an inquiry.