Glossary/True ROAS
What is True ROAS?
True ROAS is the return on advertising spend measured after every real cost of fulfilling the sale — cost of goods, marketplace commission and transaction fees, seller-funded vouchers, free-shipping subsidies, and fulfillment — instead of the gross attributed revenue that marketplace ad dashboards divide by spend. Platform ROAS answers “how much revenue did this ad touch?”. True ROAS answers “how much money did this ad leave in the business?”. On a typical Thai marketplace cost stack the two differ by a factor of two to four, which is why a campaign can look healthy on Shopee Ads and still be destroying contribution margin.
01/Formula
Formula
True ROAS = (Attributed revenue − COGS − marketplace fees − vouchers − shipping − discounts) / Ad spend
Example
A Shopee campaign reports ROAS of 4.0 (฿40,000 revenue on ฿10,000 ad spend). Deduct ฿18,000 COGS, ฿4,000 platform fees, ฿3,000 vouchers, ฿1,500 fulfillment. True ROAS = (40,000 − 26,500) / 10,000 = 1.35 — barely break-even.
02/In detail
How do you calculate true ROAS?
Start from the ad-attributed orders, not the campaign summary. For each attributed order line, take the price the buyer actually paid, then subtract the unit COGS, the category commission, the payment or transaction fee, the seller-funded share of any voucher or free-shipping promotion, the packing and courier cost, and a returns reserve. Sum what is left across the campaign and divide by the campaign spend. The calculation is only as good as its worst input: if COGS is a guess, true ROAS is a guess. Sellers who cannot get order-line data can approximate with a blended contribution rate, but the per-SKU version is what changes decisions, because ad spend almost never lands evenly across a catalogue.
True ROAS ≈ Platform ROAS × contribution rate contribution rate = (price − COGS − fees − vouchers − fulfillment) / price 4.0 × 0.34 = 1.35
What is a good true ROAS?
A true ROAS of 1.0 means the campaign returned exactly the baht it consumed — every peak-season hour of work for zero profit. Below 1.0 the campaign is funded out of the rest of the shop. The useful benchmark is not an industry average but the shop’s own break-even ROAS, which is one divided by the contribution rate. A 40% contribution product breaks even at platform ROAS 2.5; a 15% contribution product needs 6.67 before ads pay for themselves. Two campaigns with identical platform ROAS can therefore sit on opposite sides of profitability purely because of what they sell.
Why is platform ROAS always higher than true ROAS?
Because the numerator is gross. Shopee defines ROAS as ad-attributed revenue divided by ad spend, and that revenue figure is the order value before commission, transaction fees, and seller-funded promotions are taken out — none of which the ads dashboard can see, because they are settled elsewhere in Seller Centre. Two smaller effects widen the gap further: broad-match keyword expansion adds orders that would have arrived organically, and attribution credits a click for an order placed days later. Neither is dishonest reporting. It is a metric built to compare ad units, being read as if it were a profit statement.
03/Why it matters
The trap, in one paragraph.
A 4.0 platform ROAS feels profitable. A 1.35 true ROAS is barely break-even, and one bad returns week pushes it under. Sellers who optimize against platform ROAS scale exactly the campaigns that are quietly eroding margin, because the campaigns easiest to scale are usually the ones on cheap, high-competition, low-contribution SKUs. Sellers who optimize against true ROAS scale only what actually grows profit, and are usually surprised by which campaigns those turn out to be.
Common mistake
Comparing true ROAS against the Target ROAS you set inside the ad platform. Those are different scales. Target ROAS is expressed in gross attributed revenue, so a Target ROAS of 5 on a 20% contribution product is a true ROAS of 1.0 — break-even, not a target. Convert first: multiply the platform figure by the contribution rate before judging it.
04/In DataGlass
How True ROAS is used in DataGlass.
DataGlass reconstructs every ad-attributed order down to the SKU, deducts COGS, marketplace fees, vouchers, and fulfillment, and reports true ROAS per campaign, ad group, and keyword alongside the platform figure so the gap is visible rather than inferred. Recommendations to scale, hold, or pause a Shopee campaign are judged against this number, never against platform ROAS in isolation.
05/Sources
- [1] Shopee Ads Thailand — ROAS definition
Shopee documents ROAS as ad-attributed sales relative to ad spend — a gross-revenue ratio, with no deduction for commission, transaction fees, or seller-funded promotions.
- [2] Shopee Thailand — seller commission and fee schedule
The commission, transaction-fee, and Shop Voucher mechanics that sit under the revenue figure platform ROAS divides by spend.