ROAS, ROI, CPA and CAC measure four different things, yet they keep showing up in the same meetings, swapped around as if they were synonyms. A Conversion study (2024) with 312 Brazilian e-commerce managers showed that ~41% use ROAS to decide budget without considering margin, and they are systematically investing in campaigns with an invisible loss.
41%
of Brazilian e-commerce managers use ROAS to decide budget without considering margin.
Conversion / Pulso Performance BR, 2024
Half the money I spend on advertising is wasted — the trouble is I don’t know which half.
The 4 metrics in one sentence each
ROAS — return on media investment
ROAS = Revenue ÷ Media spend.
Example: I spent R$ 5,000 on ads, attributed revenue R$ 22,500. ROAS = 4.5×. Looks good? It depends. ROAS does not consider product cost, shipping, fees or taxes. It is a campaign metric, not a profit metric.
ROI — return on total investment
ROI = (Revenue − Investment − Costs) ÷ Investment × 100.
With the same example: revenue R$ 22,500, spend R$ 5,000, cost of goods sold R$ 13,500 → ROI = (22,500 − 5,000 − 13,500) ÷ 5,000 × 100 = 80%.
CPA — cost per acquisition
CPA = Spend ÷ Conversions. It is the average cost to bring in a sale. With R$ 5,000 and 180 sales, CPA = R$ 27.78.
CAC — customer acquisition cost
CAC = Acquisition spend ÷ New unique customers.
Unlike CPA, which counts every sale, CAC counts every unique customer. If 180 sales came from 120 unique customers, CAC = R$ 41.67. CAC matters when you have high LTV (recurring revenue). For one-shot products, CPA is enough.
Break-even ROAS — the calculation nobody does
Benchmarks by sector in Brazilian e-commerce
3-5×
Fashion: typical ROAS; CPA R$ 25-60; CAC R$ 50-120
3-6×
Beauty/cosmetics: CPA R$ 20-50
4-8×
Electronics: CPA R$ 50-150 (high ticket)
2.5-4×
Supplements: low ROAS, recurrence makes up for it
2-4×
Pet shop: low ROAS, focus on LTV
5-10×
Furniture: high ticket, long cycle
3-7×
Home/decor: high variety
4-9×
Accessories: high margin, mid ticket
Median ROAS by category — Brazilian e-commerce (paid media)
Source: Conversion / Pulso Performance BR — 2024 median (value ×10 for visualization)
Common mistakes (that still turn into budget)
- Comparing ROAS directly across sectors — a high ticket distorts it (5× in furniture can be worse than 3× in fashion).
- Ignoring attribution — organic sales attributed to ads inflate ROAS.
- Looking only at last-click — multi-touch matters in long cycles.
- Calculating CAC without deduplicating recurring customers.
- Not calculating break-even ROAS — a “healthy” campaign at 3× can be a loss if the margin is 25%.
References and further reading
- Wanamaker, J. (c. 1900). Attributed quote on advertising waste. in Marketing Research: An Applied Approach (Malhotra).
- Conversion (2024). Pulso Performance — E-commerce BR. Conversion / B-Capital link .
- Salesforce (2024). State of Marketing Report — 8th Edition. Salesforce Research link .
- Farris, P. et al. (2010). Marketing Metrics: The Manager's Guide. Pearson Education.
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