The higher the ROAS, the less of the market you can capture.
If you want to have a higher return, you need to spend less and make more.
Here’s why. In traditional sales funnels, we always have folks at the “bottom of the funnel” (people who are ready to buy) and folks at the “top of the funnel” (people who aren’t ready to buy yet).
Those who aren’t ready to buy are going to be more expensive. They’ll need to click on two or three ads before converting. Some of them won’t ever convert.
There's also people who will have a lower average cart value than others. So if you tell the algorithm, “I only want those who are cheap to acquire and who will spend a lot of money with me,” then you’re cutting out part of your market.
This is why a high ROAS goal will limit your ad spend and stop the account from growing.
The goal should be to choose the ROAS that’s just right (not too high and not too low) and try to maintain that ROAS while growing spend––gathering conversion patterns, optimizing the settings, keywords, product titles, etc.)
For further explanation, check out this video: