Running Dirty Dough showed me a 3:1 ROAS is just a baseline for franchises, not a goal. Our first campaigns were duds. We had to keep messing with the targeting and creative until something clicked. It took time. Forget chasing that single number. Focus on your profit margins and customer retention instead. That's how you know if the business is actually healthy.
In the restaurant business, what you get back from ads really depends on the time of year. Returns are always higher during our busy seasons, so we had to create different goals for summer versus winter. We also look at our menu margins and whether a campaign brings customers back more often or gets them to increase their spend. I wouldn't judge an ad push too quickly. You have to track if people keep coming back because of it.
For cosmetic healthcare paid ads, I stick to a 4:1 ROAS baseline, but I watch consultation bookings even closer. Linking our CRM to ad platforms clears up which campaigns are actually profitable. I see too many marketers just look at revenue, ignoring profit and lifetime value, so they either celebrate false wins or miss chances to double down on what works.
In health tech, profit margins are everything. If a customer can stick around for years of subscriptions, you can spend more on ads to get that first purchase. I've seen software services and personalized wellness plans do fine with a ROAS as low as 2:1, as long as the customer stays. So match your ad spend goals to your actual profit and customer retention, not just the initial click.
Don't get hung up on a 4:1 ROAS for Meta. It all comes down to your margins and if customers come back. When we started ShipTheDeal, we used Google Analytics and Facebook Attribution to see which ads drove repeat purchases, not just the first click. You have to tie your ROAS to actual profit and long-term value, otherwise you're just overvaluing that first sale.
In my time at Meta and now at Magic Hour, I've found that what counts as a good ROAS really comes down to the ad format. AI-made videos on Meta can lift conversions 20-30% over static ads. But those numbers shift with your profit margins and customer value. We get the return wrong by ignoring creative quality and long-term effects. My advice? Keep testing dynamic video ads and look beyond that first purchase.
In real estate investing, the usual ROAS numbers don't tell the whole story. A deal can take a year, and a referral is often worth more than a cold lead. We started tracking who came back and who they sent our way. That's when our numbers got predictable. Forget just the ad spend. Watch the relationships. People who call you because their friend recommended them? That's the real metric.
For local businesses, I've noticed things work better when you combine some targeted ads with SEO. Your ads might stop, but the visitors from Google keep coming. The biggest mistake I see is teams just looking at their ROAS number without checking actual profit or if a customer will come back. Try tracking what happens after that first purchase. The real money comes from the repeat business.
People will tell you that you need a 3:1 ROAS in SaaS, but I think that's too simple. If your customers stick around and their lifetime value is high, you can get away with a lower initial ROAS, especially when you know they'll upsell later. I lean on tools like Google Analytics and Mixpanel to see which ads or copy are actually making money, so I can switch gears quickly. The biggest mistake I see is getting stuck on short-term ROAS and not looking at the whole customer lifecycle, particularly when margins are shrinking.
In our software business, a 3:1 ROAS sounds solid and it's a decent starting point. But I learned that only looking at that short-term number was a mistake. Our customers don't just subscribe for a month and leave. They stick around for years, which makes that initial ad spend look a lot cheaper in the end. Now I always blend ROAS with their lifetime value. Focusing on long-term profit is just more reliable than chasing quick returns.