Return on Ad Spend (ROAS) is one of the most important metrics for e-commerce businesses. It measures how effectively your advertising spend is generating revenue. Understanding industry benchmarks can help you make smarter advertising decisions and scale your campaigns effectively.
In this guide, Advaita Digital Advertising explains what a strong ROAS looks like for e-commerce brands, why benchmarks vary by industry, and the important factors that determine a good ROAS.
Why ROAS Benchmarks Matter
-
E-commerce businesses differ widely in terms of:
- Product pricing
- Profit margins
- Purchase frequency
- Customer acquisition cost
These factors affect what constitutes a “good” ROAS. Industry benchmarks give you a frame of reference to evaluate campaign performance and plan growth.
Good ROAS Benchmarks by E-Commerce Category
|
E-Commerce Category |
Good ROAS Range |
Notes |
|
Fashion & Apparel |
4–8x |
Frequent purchases; repeat customers boost ROI |
|
Beauty & Personal Care |
5–10x |
High lifetime value products perform well |
|
Electronics & Gadgets |
3–6x |
Higher ticket items with longer purchase cycles |
|
Health & Supplements |
4–9x |
Subscription models help increase revenue |
|
Home & Furniture |
3–5x |
Big-ticket items; lower repeat purchases |
|
D2C Consumer Goods |
6–12x |
Strong brand loyalty drives repeat sales |
|
Luxury Goods |
2–4x |
Premium pricing with longer decision cycles |
|
Marketplaces |
4–7x |
Highly competitive ad environment |
⚠️ These are guidelines, not strict rules. Always consider your brand’s margins and objectives.
Important Factors for Determining a ‘Good’ ROAS
While benchmarks provide reference points, a “good” ROAS depends on several business-specific factors:
- Profit Margins – Products with higher margins may require a lower ROAS to remain profitable, while low-margin products need higher ROAS.
- Advertising Channel – Different platforms (Google, Meta, YouTube, Display) naturally generate varying ROAS.
- Customer Journey Stage – Awareness campaigns tend to have lower ROAS than campaigns targeting buyers ready to purchase.
- Customer Lifetime Value (LTV) – Brands with repeat buyers or subscription models can tolerate lower ROAS on acquisition campaigns.
- Competitiveness of the Market – Highly competitive industries may result in higher ad costs, impacting ROAS expectations.
- Product Price & Order Value – Higher-priced items may yield lower ROAS percentages but higher absolute revenue, and vice versa.
Considering these factors helps e-commerce brands interpret ROAS meaningfully instead of relying solely on industry averages.
Typical ROAS by Channel
-
Channel Expected ROAS Google Shopping Moderate to high Google Search Ads Moderate Meta Advantage+ High for conversion-focused campaigns YouTube Ads Lower for awareness campaigns Display / Retargeting High when layered with search/social actions
How Brands Can Interpret ROAS Benchmarks
- Compare your ROAS to industry standards to see if campaigns are performing well.
- Look at channel-level performance to understand which platforms generate the best returns.
- Focus on long-term profitability rather than short-term numbers alone.
- Factor in the important determinants of a good ROAS listed above to make smarter decisions.
- Use benchmarks to identify campaigns to scale or optimize.
How Advaita Digital Advertising Helps E-Commerce Brands
-
We help e-commerce brands achieve profitable growth by:
- Running multi-channel campaigns (Google, Meta, YouTube)
- Optimizing for conversions without overcomplicating metrics
- Using AI-powered tools (Performance Max + Advantage+) for efficiency
- Continuously improving campaign performance based on trends
Conclusion
A good ROAS varies by industry, channel, and customer behavior, but understanding the key factors that determine ROAS helps you evaluate campaigns accurately. Benchmarks are useful, but true insights come from combining them with your brand’s margin, customer lifetime value, and marketing strategy.
Want to benchmark your ROAS and grow your e-commerce business profitably? Get a free consultation with Advaita Digital Advertising today.