Why ROAS Doesn’t Tell the Full Story in Paid Media

Why ROAS Doesn’t Tell the Full Story in Paid Media
When it comes to measuring the success of paid channels, many brands still focus on Return on Ad Spend (ROAS). It’s simple, it looks positive in a dashboard, and it’s widely reported. But the reality is that ROAS often flatters. It rewards channels that recycle existing customers, not those that deliver real growth.

The 90-Day Review
We recently analysed a new client’s paid activity across Meta Ads and Klaviyo. The results highlighted the difference between growth and retention:

Meta Ads generated 493 orders. 214 were new customers, with an End CAC (all costs included) of around £39.
Klaviyo generated 307 orders. Only 60 were new customers, with an End CAC of around £25.
On the surface, Klaviyo looked more efficient, but the majority of its sales came from returning customers. Meta was more expensive, but it was the only channel consistently bringing in new eyes.

Why End CAC Matters
End CAC (end-to-end customer acquisition cost) calculates the true cost per new customer, including ad spend, management fees, and tools. It forces you to separate acquisition from retention.

ROAS tells you if revenue is coming in.
End CAC tells you if your customer base is actually growing.
The Takeaway
Paid media shouldn’t be judged on ROAS alone. Brands that want to scale need to track the cost of acquiring new customers separately from the cost of monetising existing ones.

Meta should be treated as an acquisition channel. Klaviyo (and other retention tools) should be measured as monetisation channels. Both are important, but they play different roles.

If you’re chasing ROAS instead of End CAC, you may not be growing at all — you may just be buying back the customers you already had.