If you run Google Ads or are thinking about launching a campaign, one of the most critical metrics to understand is ROAS — Return on Ad Spend. It’s a clear-cut way to measure how effectively your advertising dollars are converting into revenue. But how do you know what a "good" ROAS is? The answer depends heavily on your industry.

In this guide, we’ll explore what ROAS is, why it matters, and how average ROAS benchmarks differ across industries. Plus, we’ll offer insights to help you maximize your Google Ads performance — and why working with a digital marketing partner like AAMAX can give you an edge.

What Is ROAS?

ROAS (Return on Ad Spend) measures how much revenue you earn for every dollar spent on advertising. It’s calculated using this simple formula:

ROAS = Revenue from Ads / Cost of Ads

For example, if you spent $1,000 on Google Ads and earned $5,000 in revenue from those ads, your ROAS would be 5:1 (or simply 5).

A higher ROAS means better performance and profitability. However, what qualifies as "good" ROAS depends on your business model, margins, and industry standards.

Why ROAS Matters in Google Ads

• Measures Campaign Profitability: ROAS tells you whether your ads are generating enough revenue to justify the spend.
• Informs Budget Allocation: High-ROAS campaigns can receive more budget; low-performing ones can be optimized or paused.
• Supports Scaling Decisions: With strong ROAS, scaling your campaigns becomes safer and smarter.

While other KPIs (like CTR or CPC) offer valuable insights, ROAS is the ultimate bottom-line metric.

Average ROAS Benchmarks by Industry

Now let’s look at the average ROAS across different industries using data from recent studies and reports.

1. Ecommerce

• Average ROAS: 4.0 - 6.0
• Why It Varies: Product margins vary widely. Electronics may have a ROAS of 3, while fashion brands might push 8+.
• Key Insight: Strong creatives, smart bidding, and shopping feed optimization can significantly boost ROAS.

2. Retail

• Average ROAS: 3.5 - 6.5
• Typical Goals: Seasonal promotions often impact this number. Branding campaigns might deliver lower short-term ROAS but grow long-term equity.

3. Legal Services

• Average ROAS: 3.0 - 5.0
• Context: Lead value is high, but the cost per click can be very expensive ($50+ per click in some niches).
• Strategy Tip: Focus on high-intent keywords and optimize landing pages to improve lead-to-client conversion rates.

4. Health & Wellness

• Average ROAS: 2.5 - 4.5
• Challenges: Compliance regulations can limit ad copy and targeting.
• What Works: Educational content and remarketing to nurture leads.

5. Finance & Insurance

• Average ROAS: 2.0 - 4.0
• Reason for Lower ROAS: High CPCs and long sales cycles
• Optimization Tip: Retargeting, customer education funnels, and precise audience segmentation are key.

6. Real Estate

• Average ROAS: 2.5 - 4.5
• Big Ticket Sales: The payoff is high, but leads can be expensive to acquire.
• Best Practices: Use video ads and hyper-local targeting.

7. B2B Services

• Average ROAS: 3.0 - 5.0
• Challenges: Longer sales cycles, low initial conversions
• Recommendations: Focus on lead nurturing, value-based landing pages, and CRM integration.

8. Education & Online Courses

• Average ROAS: 3.0 - 6.0
• Growth Area: High demand for online learning
• Winning Tactics: Use urgency, limited-time offers, and showcase testimonials.

9. Automotive

• Average ROAS: 4.0 - 8.0
• Why It Performs Well: High transaction value and strong local intent
• Pro Tip: Google Vehicle Ads and localized campaigns help improve performance.

10. Travel & Hospitality

• Average ROAS: 3.0 - 6.0
• Post-Pandemic Rebound: Growing interest in travel is pushing better ROAS numbers
• Tactics That Help: Dynamic ads, remarketing, and bundled offers

Factors That Influence Your ROAS

Even within the same industry, ROAS can vary based on factors like:

• Ad Quality: Strong ad copy and visuals improve CTR and conversion.
• Landing Page Experience: Poor UX kills conversion rates.
• Audience Targeting: Precision reduces wasted ad spend.
• Sales Funnel: ROAS improves with effective follow-up and nurturing.
• Attribution Model: Choosing the right model can affect how you interpret performance.

How to Improve ROAS on Google Ads

Here are proven ways to increase your ROAS:

1. Use Smart Bidding

Leverage Google's automated bidding strategies like Target ROAS or Maximize Conversions to align with business goals.

2. Refine Targeting

Use audience signals, retargeting, and geo-location filters to reach the most relevant users.

3. Test Landing Pages

A/B test your landing pages to see which design, message, or CTA converts better.

4. Invest in Creative

High-performing ad creatives can lift CTR and Quality Score, reducing costs.

5. Implement Negative Keywords

Prevent your ads from showing for irrelevant or low-intent searches.

6. Track Conversions Properly

Set up Google Ads conversion tracking and integrate it with Google Analytics for better accuracy.

7. Retarget Past Visitors

Remarketing campaigns typically deliver higher ROAS due to familiarity and past engagement.

ROAS vs. Other Metrics

While ROAS is vital, it’s one piece of the puzzle. Consider these other metrics:

• Customer Lifetime Value (CLTV)
• Conversion Rate (CVR)
• Click-Through Rate (CTR)
• Cost Per Acquisition (CPA)
• Impression Share

Combining ROAS with other KPIs helps provide a full picture of ad performance.

Final Thoughts

Knowing your industry’s average ROAS gives you a helpful benchmark. But remember — it's not a ceiling. With the right strategy, tools, and team, your business can outperform the average.

At the end of the day, successful Google Ads campaigns require ongoing optimization, expert insights, and creative execution. That’s where AAMAX comes in. AAMAX is a full-service digital marketing agency offering Web Development, SEO, and Google Ads services designed to maximize your ROI.

Let AAMAX help you turn clicks into customers and stretch every advertising dollar further.