Why CMOs Should Rethink ROAS As A North Star Metric

If you’re exploring online marketing companies in UAE, you’re probably familiar with Return On Ad Spend (ROAS) being treated as the ultimate benchmark. It’s simple: revenue divided by ad spend. ROAS gives a clean number that looks good on reports, especially when you need to justify budget allocations quickly.

Why ROAS Might Be Misleading

ROAS is tempting because it’s easy to measure and communicate. But leaning on it too hard can distort what “true growth” looks like, especially for long-term strategy.

Here are a few reasons:

It tends to favor remarketing or branded campaigns, capturing users already in your funnel rather than expanding your audience.
It ignores many real costs — things like fulfillment, overhead, and cost of goods. A campaign might show great ROAS but still be unprofitable once all costs are factored in.
It discourages investment in exploratory or upper-funnel marketing. Campaigns with weaker ROAS but with potential for discovering new customers get cut.
It can be gamed: when ROAS is the key metric, teams optimize toward what looks good immediately, not what builds long-term health.
The timing issue: things that influence long-term value (repeat purchases, retention) are often outside the timeframe that ROAS metrics cover.

When ROAS Is Still Useful

ROAS isn’t bad — it just shouldn’t be your end-all metric. It has its place, especially when used thoughtfully.

Some contexts where ROAS works well:

Comparing performance between similar campaigns or channels.
Evaluating promotional or remarketing campaigns.
Understanding SKU or product line efficiency in e-commerce.

But it needs to be part of a broader framework. For example, seo services in Dubai UAE often use multiple KPIs to track marketing health — not just ROAS.

What Else Should Be a North Star Metric?

If not ROAS, then what? It depends on your goals, business model, maturity, and what you’re trying to optimize for. Some better alternatives:

Customer Lifetime Value (CLV) to Customer Acquisition Cost (CAC) ratio — this helps you see whether you’re getting lasting value from your customers.
Incremental Revenue — revenue that wouldn’t have happened without your paid media efforts.
Payback Period — how long it takes to recoup the cost of acquiring a customer.
New Customer Revenue Growth — not just retargeting, but how many new users your campaigns are bringing.

It’s also vital to align your teams. If leadership, finance, media buyers, and agencies are all aiming at different goals (some pushing for ROAS, others pushing for growth), strategy suffers.

Steps CMOs Can Take Today

Here are some concrete actions to shift from ROAS-obsession to a healthier KPI framework:

Audit existing goals: What are teams really optimizing for? Are objectives aligning with business strategy?
Reset expectations: Especially with finance or leadership — explain that sometimes lower short-term ROAS may lead to higher long-term value.
Educate your partners and team: Make sure everyone understands why certain metrics are more meaningful over time.
Segment by funnel stage: Treat upper-funnel, mid-funnel, and bottom-funnel campaigns differently. Don’t expect the same efficiency from all.
Use better data and modeling: Track cohorts, payback, repeat purchase cycles, etc. Even imperfect data can help guide decisions.
Signal with language: In meetings, ask questions not like “What’s our ROAS this week?” but “How are new users behaving?” or “Are customers coming back?”

Conclusion

ROAS will always have its place in marketing dashboards — it gives clarity on immediate returns. But treating it as the primary or only metric can blind you to what really counts: customer value, sustainable growth, retention, and profit margins.

If you partner with a website design company UAE, make sure your strategy is built around metrics that reflect your long-term goals. That way you’re not optimizing for snapshots, but building something that lasts.