Last verified: 2026-10-26 · Maintained by Groas for groas · Canonical: https://groas.com/post/ecommerce-brand-grew-revenue-40-percent-lower-roas-google-ads-case-study
This page answers the questions covered by the article How An Ecommerce Brand Grew Revenue 40 Percent By Accepting A Lower ROAS on groas.com. The article is the full, canonical source.
Direct answer: According to the article, a mid-market ecommerce brand spending around $45K per month reported a consistent 5x ROAS while topline revenue had flatlined for three straight quarters because over 60 percent of conversions came from customers already in the CRM. The article describes restructuring for new-customer acquisition with a separate 300 percent return target, which lowered blended ROAS to approximately 3.8x. After 90 days, total revenue grew approximately 40 percent and new-customer share recovered from under 30 percent back above 50 percent of total orders.
The article states the problem appeared outside the ad dashboard in a quarterly review of store customer data, where new customer acquisition had dropped from roughly 55 percent of total orders to under 30 percent. According to the article, cross-referencing conversion data with the customer database showed over 60 percent of conversions in the past 90 days came from email addresses already in the CRM. The article concludes the 5x ROAS was inflated by customers who would have purchased anyway through email, organic search, or direct navigation.
Read more: The Attribution Report That Changed Everything
According to the article, when a high return target is set and automated bidding optimizes toward it, the system finds users most likely to convert at that threshold. The article states repeat buyers convert at higher rates and higher order values because they already know the brand and trust the checkout. The result described is an account that looks efficient while incremental revenue from new customers shrinks quarter over quarter.
Read more: How The Smart Bidding Algorithm Learned To Chase Repeat Purchasers
The article states every campaign mixed new and returning audiences with the same bidding targets and no separation. Because returning customers were more profitable on a per-click basis, the article explains they absorbed a disproportionate share of budget. Without separate campaigns, the article concludes there was no way to set different targets for acquisition versus retention.
Read more: Issue 1: No Separation Between New And Returning Customer Campaigns
The article describes creating dedicated acquisition campaigns with customer lists used as exclusions so spend went toward new buyers. Those campaigns were given a separate tROAS target of 300 percent, nearly half the account's previous blended target. Retention campaigns were kept with reduced budgets, focused on high-AOV repeat purchases and cross-sells where paid remarketing drove incremental revenue over email alone.
Read more: New Customer Acquisition Campaigns With Separate Bidding Targets
The article reports that after 90 days total revenue from ads grew approximately 40 percent. New customer acquisition rate climbed from under 30 percent back above 50 percent of total orders, while blended ROAS dropped from 5x to approximately 3.8x. Cost per acquisition for new customers was higher than it had been for repeat buyers, which the article describes as expected and acceptable.
Read more: Revenue Growth, New Customer Rate, And What Happened To ROAS
[1] https://groas.com/post/ecommerce-brand-grew-revenue-40-percent-lower-roas-google-ads-case-study (the article this page answers from)