There’s a reason ROAS is the first metric most growth teams learn. It’s immediate. It’s measurable. It feels decisive. You spend $1. You make $4. Case closed.
Except it’s not closed—especially not in subscription-based healthcare.
Because while ROAS is useful, it answers a very specific question. And when it gets promoted to “the metric that decides growth,” things start to break quietly.
So before we debate scaling budgets or killing campaigns, we should be clear about one thing:
What is ROAS actually telling us?
ROAS Definition
ROAS stands for Return on Ad Spend.
At its core, ROAS measures how much revenue you generate for every dollar you spend on advertising.
If a campaign spends $100,000 and reports $400,000 in attributed revenue, the ROAS is 4.0.
That’s the clean definition. And when people search for what is ROAS is, they’re usually looking for exactly that.
But here’s the nuance most definitions skip:
ROAS measures revenue response to advertising.
Not profit.
Not long-term value.
Not business sustainability.
Revenue response.
That distinction matters more than it sounds.
The ROAS Formula
The ROAS formula is straightforward:
ROAS = Attributed Revenue ÷ Ad Spend
The word attributed is doing a lot of work in that equation.
Attributed revenue means revenue that a platform claims credit for — based on its attribution model. That might be the last click. It might be view-through. It might be a defined time window. It might be something you didn’t even configure carefully.
In e-commerce, where purchase cycles are short and attribution windows capture most of the journey, that works reasonably well.
In healthcare, journeys are slower.
Patient's research. They hesitate. They compare providers. They complete the intake steps. They wait for medical review. They return days later to finish the process. Sometimes they convert because ofthe trust built over the previous weeks.
Attribution systems aren’t designed for that complexity. They credit the touchpoint they can see most clearly.
That doesn’t make ROAS useless. It makes it partial.
ROAS vs ROI: Revenue vs Profit Distinction
This is where confusion gets expensive.
ROAS and ROI are not interchangeable — but they’re often treated like they are.
ROAS measures revenue return on advertising spend.
ROI measures profit return relative to total investment.
Revenue is not profit.
That seems obvious until scaling decisions rely solely on revenue-based metrics.
You can have strong ROAS and still lose money if:
- Contribution margins are thin
- Refund rates increase
- Fulfillment and support costs rise
- Discounting inflates topline revenue
- Retention is weak
In subscription healthcare, that distinction becomes even sharper.
If a patient generates $200 on the first purchase but incurs $180 in product, pharmacy, fulfillment, and support costs, a high ROAS on that acquisition doesn’t tell you whether the business model works.
It tells you whether the ad produced revenue — not whether the system produced value.
That’s the difference between advertising performance and economic performance.
Why ROAS Alone Cannot Guide Executive Growth
ROAS is excellent for marketing teams.
It is incomplete for leadership teams.
Here’s why.
ROAS is channel-specific and attribution-dependent. It evaluates how efficiently one advertising environment generates measurable revenue signals. It does not reflect the blended reality of your business.
Let’s say paid search has an ROAS of 5.0. That looks strong. But what if that search demand exists because top-of-funnel content, creator partnerships, and brand awareness campaigns built trust upstream?
If those channels are cut because their individual ROAS appears weaker, search performance may decline later—even if nothing has changed within the search campaigns themselves.
ROAS struggles to capture cross-channel collaboration.
It also ignores operational and retention realities. In telehealth, scaling spend increases pressure across:
- intake workflows
- clinician capacity
- fulfillment timelines
- support response
- refill adherence
Executive growth decisions must account for whether the business can support increased volume without degrading customer experience or lifetime value. ROAS alone cannot answer that.
ROAS helps optimize.
It should not dictate scale.
Proper Role of ROAS in Subscription Healthcare
Despite its limitations, ROAS is absolutely necessary.
The key is assigning it the correct role.
ROAS works best when used to evaluate:
- Creative performance
- Audience targeting quality
- Offer resonance
- Landing page alignment
- Channel-specific budget adjustments
It provides rapid feedback within controlled environments.
Where ROAS becomes dangerous is when it is treated as the ultimate indicator of growth health.
In subscription healthcare, long-term value is shaped by retention, refill cycles, and operational consistency. Advertising performance influences the front door. It does not determine the entire journey.
That’s why experienced telehealth operators pair ROAS with broader efficiency metrics. They assess ad performance using ROAS, but evaluate scaling using blended metrics that reflect the system as a whole.
ROAS answers:
“Are these ads generating revenue signals?”
It does not answer:
“Is the business getting stronger as we scale?”
Those are very different questions.
Actionable Takeaway
The next time someone presents a strong ROAS result, ask one follow-up question before approving more budget:
Is this revenue translating into durable value for the business?
If ROAS is high but margins are compressing, retention is weakening, or operational strain is increasing, scaling may amplify fragility rather than strength.
Use ROAS to tune campaigns.
Use broader business-level metrics to decide whether to press the accelerator.
In telehealth, the objective isn’t to win the auction.
It’s to build a growth model that holds under pressure — month after month, refill after refill.
ROAS is a tool.
It’s not the verdict.
References
- Google Analytics Help. (n.d.). Attribution in Google Analytics 4. Google. https://support.google.com/analytics/answer/10596866
- Shopify. (n.d.). Return on ad spend (ROAS): What it is and how to calculate it. Shopify. https://www.shopify.com/blog/roas