ROAS SPECIAL EP1: Where did Retail Media ROAS come from?
ROAS. Four little letters that have somehow taken over retail media.
It appears in conference decks. It lives in ad-platform dashboards. Vendors love it. CFOs ask for it. Marketers stare at it while quietly wondering whether they’re measuring the right thing at all.
In this first episode of The Retail Media Therapy Guide to Everything You Always Wanted to Know About ROAS But Were Afraid to Ask, Viv and Colin get on the measurement couch to ask a deceptively simple question:
Why the hell did ROAS become the default language of retail media?
And, more importantly, should it have?
First: let's stop mixing up the words
Measurement, metrics, attribution and incrementality are related, but they are not the same thing.
So why is everyone obsessed with ROAS?
The episode explores four big reasons.
1. Amazon.
For a long time, retail media was effectively synonymous with Amazon. As Amazon evolved into a major pay-to-play advertising platform, particularly around sponsored products, suppliers understandably wanted to know whether their increasingly expensive investment was generating a return.
ROAS made sense in that environment.
And then, apparently, we collectively decided it should make sense everywhere.
2. Ad tech.
Ad platforms have helped bake ROAS into the operating system. Set your ROAS target. Optimise towards your ROAS target. Report your ROAS.
Lovely and simple.
Possibly too simple.
3. Retail media was treated as performance media.
Retail media audiences are often close to the bottom of the funnel, so a performance metric like ROAS feels like an obvious fit.
But retail media has grown up.
It now spans on-site, off-site and in-store, and increasingly plays across the funnel. Different objectives and different funnel stages require different measures.
One metric to rule them all? Probably not.
4. Humans like simple numbers.
This may be the most powerful reason of all.
ROAS is easy to understand. A higher number sounds better.
And therein lies the trap.
The ROAS paradox
One of the central arguments in this episode is that optimising relentlessly for high ROAS can actually restrict growth.
Why? Because chasing efficiency can encourage brands to focus on people who are already highly likely to buy - rather than finding new customers, building penetration or supporting genuinely incremental growth.
You can therefore celebrate a beautiful ROAS number while quietly strangling your brand's growth.
The goal isn't to kill ROAS.
It's to stop treating it like the answer to every question.
Because if your only tool is a hammer, eventually every business problem starts looking suspiciously like a nail.
And sometimes it's actually a CFO.
What's coming next?
This is only the beginning of the ROAS Special Series of Retail Media Therapy podcasts exploring measurement.
Future episodes will dig into: