ROAS, return on ad spend, is the metric most brands use to judge their Meta and Google advertising, and for luxury brands it is one of the most misleading numbers they can optimise against. A luxury brand asking "what ROAS should we expect" is asking a reasonable question with a dangerous answer, because the headline ROAS reported in the ad platforms systematically misrepresents how luxury actually gets bought. Chase a high reported ROAS and a premium brand will optimise itself into cheap conversions it would have won anyway, and away from the prospecting that actually grows the business. The number is not useless, but it has to be understood correctly, and most brands do not understand it correctly.
The reason is that ROAS was built for a simple purchase: someone sees an ad, clicks, buys, and the platform credits the sale to the ad. That model roughly holds for a twenty-pound impulse product. It breaks down completely for a considered luxury purchase that involves weeks of research, multiple visits across devices, and often a final purchase made offline in a boutique. In that world, the ad that started the journey gets no credit, the ad that appeared just before the sale gets all of it, and the reported ROAS tells you almost nothing about what actually drove the revenue.
Several features of luxury buying combine to make platform-reported ROAS unreliable, and understanding them is the difference between judging advertising well and judging it badly.
Long consideration cycles. A luxury purchase is rarely made on first exposure. Someone buying a significant watch, a piece of jewellery, or a high-end item researches for weeks, returns repeatedly, and deliberates before committing. The ad that first created the desire may have run a month before the sale, and last-click ROAS gives it no credit at all, attributing everything to whatever appeared just before the purchase. This systematically undervalues the prospecting and brand-building work that actually starts the journey.
Offline and cross-channel conversion. Many luxury purchases happen in a boutique, over the phone, or through a client advisor, not in the browser session the platform can see. When the sale happens offline, the ad platform never records it, so the ROAS on campaigns that drove store visits or enquiries reads as far lower than the truth. A campaign that filled a boutique with qualified buyers can show a poor ROAS simply because the platform could not see the sales it produced.
The prospecting versus retargeting distinction. This is the trap that catches most brands. Retargeting campaigns, which advertise to people who already visited the site or engaged with the brand, show very high ROAS, because they are harvesting demand that largely already existed. Prospecting campaigns, which reach new audiences, show low ROAS, because they are creating demand that converts later. A brand that judges the account on reported ROAS will conclude that retargeting is brilliant and prospecting is failing, and will shift budget accordingly, cutting the very campaigns that generate new customers and pouring money into claiming credit for demand it already had. This is how ROAS optimisation quietly strangles growth.
High value and low volume. Luxury sells fewer units at higher prices, which means the data is thinner and noisier than a high-volume account, and a single large sale can swing a campaign's ROAS dramatically. Judging low-volume luxury campaigns on short-term ROAS reads too much into too little data, and encourages decisions based on noise rather than signal.
Brands still want a number, so it is worth being honest about what the ranges tend to look like, with the heavy caveat that they vary enormously by brand, category, price point, and how the account is structured. These are directional, not promises.
The pattern, rather than any single figure, is what matters. Retargeting and branded search, which capture existing demand, tend to show strong reported returns, often several times spend, because they are harvesting people already close to buying. Prospecting on Meta and non-brand Google, which creates new demand, tends to show much lower reported returns in the platform, sometimes at or around break-even on a last-click basis, because the value it creates shows up later and elsewhere. Google generally shows higher reported ROAS than Meta for the same brand, because Google captures intent, people actively searching, while Meta more often creates and nurtures demand that converts down the line. None of this means Meta prospecting is failing and Google retargeting is winning. It means they are doing different jobs, and their reported ROAS reflects the job, not the value.
The practical consequence is that setting a single ROAS target across the whole account is a mistake. A blended target that treats brand-building prospecting and demand-harvesting retargeting the same will always push budget toward the harvesting and away from the building, which is the opposite of what a growing luxury brand needs. Expectations have to be set by the job each campaign is doing.
If reported ROAS misleads, what should a luxury brand judge its advertising on? The answer is a small set of measures that reflect how luxury is actually bought and grown.
Blended ROAS. Total revenue divided by total ad spend across the whole account and, ideally, across channels, rather than the platform-reported figure for individual campaigns. Blended ROAS strips out the double-counting and the last-click distortion and tells you whether the marketing as a whole is producing revenue efficiently. It is a truer measure of the account's contribution than any single campaign's reported number.
New-customer ROAS and acquisition cost. Separating the return on newly acquired customers from repeat business, because prospecting's job is acquisition, and its value is hidden when new and returning revenue are mixed. Understanding what it costs to acquire a truly new customer, and what that customer is worth, is what lets a brand judge prospecting fairly rather than punishing it for not harvesting existing demand.
Lifetime value against acquisition cost. In luxury, the first purchase is often a fraction of the customer's total value, so judging advertising on the first sale alone dramatically undervalues it. Measuring the lifetime value of acquired customers against what they cost to acquire reframes the whole question: a campaign with a poor first-purchase ROAS can be highly profitable once the full relationship is counted, which is exactly the case for many luxury acquisitions.
Incrementality. The most rigorous measure: testing what actually happens to sales when advertising is turned on or off, or held out from a portion of the audience, to see the real lift the advertising creates rather than the credit the platform claims. Incrementality testing consistently shows that reported ROAS overstates advertising's contribution, especially for retargeting and branded search, which claim credit for conversions that would have happened anyway. For a brand serious about knowing what its advertising is really worth, incrementality is the truth the reported numbers obscure.
Offline and pipeline contribution. Where luxury purchases happen in boutiques or through advisors, connecting advertising to store visits, enquiries, and offline sales, even imperfectly, captures value the platforms miss entirely. A campaign judged only on online ROAS will always undervalue advertising that drives offline revenue.
Putting it together, a luxury brand should run and judge its Meta and Google advertising differently from a volume retailer. Structure the account by job, separating prospecting that builds demand from retargeting and branded search that harvest it, and set different expectations for each rather than one blanket ROAS target. Judge the account on blended ROAS, new-customer economics, and lifetime value rather than platform-reported campaign ROAS. Run incrementality tests where possible, to know what the advertising is really contributing rather than what it claims. And connect the measurement to offline and pipeline outcomes, because in luxury a great deal of the revenue advertising drives never shows up in the browser.
Above all, resist the pull of the reported number. The single most common way luxury brands damage their own growth on Meta and Google is by chasing a high reported ROAS, which steadily shifts budget toward harvesting existing demand and away from creating new customers, until the account looks efficient and the business stops growing. The reported ROAS is a symptom, not a target. What matters is whether the advertising is bringing valuable new customers efficiently, and that question is answered by blended returns, lifetime value, and incrementality, not by the number the platform puts at the top of the dashboard.
What ROAS should a luxury brand expect from Meta and Google Ads?It varies enormously by brand, category, price point, and account structure, so any single figure is misleading. The pattern matters more than the number: retargeting and branded search, which harvest existing demand, tend to show strong reported returns, while prospecting that creates new demand shows much lower reported returns because its value appears later and often offline. Google generally shows higher reported ROAS than Meta because it captures active intent.
Why is ROAS misleading for luxury brands?Because luxury involves long consideration cycles, cross-device research, and frequent offline purchases, none of which platform-reported, last-click ROAS captures well. The ad that started a weeks-long journey gets no credit, offline sales are invisible, and retargeting claims credit for demand that already existed. As a result, reported ROAS systematically undervalues prospecting and brand-building and overvalues demand-harvesting.
What is the difference between prospecting and retargeting ROAS?Retargeting advertises to people who already engaged with the brand, so it shows high ROAS by harvesting demand that largely existed already. Prospecting reaches new audiences and creates demand that converts later, so it shows low reported ROAS. Judging the account on reported ROAS makes brands cut prospecting and over-invest in retargeting, which strangles the acquisition of new customers and, with it, growth.
What metrics should luxury brands use instead of reported ROAS?Blended ROAS across the whole account, new-customer ROAS and acquisition cost, lifetime value against acquisition cost, incrementality testing, and offline and pipeline contribution. Together these reflect how luxury is actually bought: over long cycles, often offline, with the first purchase a fraction of the customer's total value. They reveal what advertising is really contributing, which reported ROAS obscures.
Should a luxury brand set a single ROAS target for the whole account?No. A single blended target treats brand-building prospecting and demand-harvesting retargeting the same, which always pushes budget toward harvesting and away from building. Expectations should be set by the job each campaign does: prospecting judged on new-customer acquisition and lifetime value, retargeting and branded search judged on efficiency and, ideally, incrementality to check they are adding value rather than claiming it.
