Numbers that tell a story have always been the focal point for performance marketers. Return on ad spend, or ROAS, has long been one of those top-tier metrics that signal your campaigns are working. Spend a dollar, make four — a clear formula for success.
What looks good in the short term can hide the real truth about profitability, though. A campaign showing a strong ROAS today could flatline when you try to scale. Another might seem underwhelming at first, yet quietly drive customers who come back again and again. This is because ROAS tells you what happened after the first click, but not what happens after the customer relationship begins.
To unlock true growth metrics, marketers must move beyond surface-level metrics and look at what each customer is worth over time: In other words, their lifetime value (LTV). Understanding and optimizing for LTV demonstrates the full financial impact of your campaigns, turning isolated wins into sustainable performance.
The Short-Sightedness of ROAS: Why the Picture Is Incomplete
ROAS is fast to calculate, easy to benchmark, and gives an immediate sense of effectiveness, but it primarily measures revenue from the first purchase, not the entire customer journey. When marketers rely solely on ROAS, they risk optimizing for the wrong outcomes. A campaign that delivers strong initial returns may not generate repeat business, while a campaign that looks unprofitable within the first week might actually attract loyal, high value customers who purchase multiple times in the coming months.
This is particularly evident in e-commerce and lead generation campaigns, where conversions don’t always translate into immediate revenue. Some customers take weeks to complete a purchase, while others enter the funnel as leads, then convert months later. If marketers pause those campaigns, you risk cutting off your most valuable audience before results can even be gathered.
For example, picture two e-commerce campaigns running side by side: Campaign A drives an average order value of $50 with a ROAS of 4:1 on the first purchase. Campaign B delivers a 2:1 ROAS on initial orders, but these customers have a 60% repurchase rate in the coming months, with many spending more as their brand trust builds.
By the end of the first week, Campaign A appears to be the better investment, but at the three-month mark, Campaign B delivers nearly double the total revenue per customer and a stronger overall profit margin. The difference isn’t in creative or targeting, but time: Campaign B’s customers kept buying long after Campaign A’s churn post-purchase.
This is where the short-sightedness of ROAS is apparent — it rewards immediacy, not long-term endurance. When you only measure performance in the first few days or week, you risk turning off campaigns that quietly build long-term customer relationships.
On platforms like Realize, it’s possible to attribute data to first and last click attribution, taking into account advertising placements where a first click may be generated, but a sale doesn’t take place until later. Nadim Batista-Kuttab, CEO and co-founder of Xevio, notes that his company saw that for every last click sale generated by Realize, there were three to four first click sales that began from that same interaction. Without both first and last click, you miss out on the true impact of your campaigns.
LTV as the “King of Metrics”: The Key to Sustainable Growth
Calculating LTV doesn’t need to be complicated. Use this simple formula:
LTV = (Average Purchase Value) x (Purchase Frequency) x (Customer Lifespan)
For example, if your average customer spends $75 per order, makes three purchases a year, and stays active for two years, their LTV is $450.
Different industries use variations of this framework:
- E-commerce: Calculate the average revenue per customer over a six- to 12-month window, factoring in repeated purchases and upsells.
- Lead generation: Track the average contract value or recurring revenue per converted lead.
- Subscriptions: Use churn rate and average monthly spend to estimate total customer lifespan.
The most important part to remember is the overall perspective. Even an approximate LTV benchmark can help you to understand true profitability far better than a single ROAS snapshot.
Long-Term Growth
ROAS and LTV don’t need to compete, and instead should both be used to review the agility of your campaign in the short term, and the long-term strategy moving forward.
In the early stages of a campaign, optimizing for immediate metrics like CPA and ROAS helps you quickly identify what’s working. Later, you can go back and review which campaigns actually drove more customers. Measuring at 30, 60, 90, or even 180 days can help you see how each channel contributes to profitability. Campaigns that look excellent after one week could be poor long term, while others that are performing averagely could be the standout winners by two or three months.
Integrating data is essential for getting this big picture view. Platforms can only optimize based on the numbers they receive: If you’re not feeding long-term profitability data, such as repeat business or lifetime revenue, into the algorithm, you will continue optimizing only for short-term efforts.
When you share information back into a platform like Realize, the algorithm begins to understand what a high value customer looks like for you. It will then begin to prioritize placements, audiences, and creative to attract these types of buyers, rather than always going for the cheapest click. Over time, these shifts compound. Your cost per conversion may be slightly higher, but your total revenue per customer rises.
Native Advertising and LTV
One of the most powerful ways to harness LTV is through native advertising on the open web. This reaches customers when they’re in the right mindset for researching and learning, making it ideal for generating awareness and attracting high-intent customers early in the funnel.
In contrast, walled gardens like Meta and Google mean that there’s limited inventory and highly competitive auctions, unlike the great “bazaar” of the open web. Marketers working with Taboola can choose exactly where and how to engage users, refining targets that gather the strongest performance data. This flexibility not only helps capture first-click traffic, but builds stronger and more lasting relationships with audiences across content that these users trust.
The result is an ecosystem where LTV can flourish. When measured over time, those early engagements reveal their true worth. This means that in an open web environment, first click information is often just the beginning of a longer, more profitable relationship.
Data and AI in the LTV Flywheel
LTV-focused marketing efforts rely on endless amounts of data. The more you understand about your customers’ behavior, the more effectively you can optimize for acquisition and retention. Today, AI makes that process faster and smarter.
Platforms like Realize use AI-driven modeling to identify signals that predict high-value customers, and help advertisers to automatically bid toward placements that are most likely to yield profitable, repeat customers. This is all possible through analyzing conversion quality and engagement patterns based on the updated information input into the platform.
This in turn creates a feedback loop — campaigns generate conversion, conversion data is fed into Realize, the algorithm identifies high LTV patterns, campaigns are then reoptimized toward those audiences.
Not only does this result in more conversions, but better quality ones, too. This means you can set higher cost per acquisition goals and scale campaigns more aggressively, because your spending is driving meaningful, lasting customer relationships over one-time transactions.
For instance, Xevio clients now use intraday scaling, a strategy where budget is temporarily increased to account for best-performing days. Because campaigns are optimized toward long-term LTV, scaling harder without cannibalizing profit is now possible.
How to Implement LTV-Focused Strategies
To make LTV actionable, marketers can follow a simple roadmap:
- Define your measurement window: Choose a timeframe that reflects your product’s natural purchase cycle, i.e., 30, 60, 90, or 180 days.
- Unify your data sources: Blend information from Realize, Meta, Google, and your CRM or e-commerce system to create a single source of data.
- Segment your cohorts: Identify which campaigns and creatives drive the highest value customers over time, not immediate buyers, and segment those out for potential further analysis.
- Feed profitability signals back into Realize: Give the algorithm visibility into which customers deliver recurring value, so it can adjust targeting and bidding strategies accordingly.
Each step of this process builds on the next, allowing you to refine your creative strategy and investment.
Rising acquisition costs, fragmented attribution, and multi-device behavior have now made it very difficult to rely on single-metrics alone. Marketers who optimize for both short-term ROAS and long-term LTV have a much stronger understanding both of what converts and endures, with greater insight into the most loyal customers and which creatives or placements generate these, and how they compound over time.
Key Takeaways
ROAS will always be a useful tool, giving you the pulse of daily performance. But, if you think of LTV as the overall heartbeat, you get a much better read on long-term success. When marketers start thinking beyond immediate returns and focus on the full lifespan of a customer, they’re able to make better decisions, scale smarter, and build more resilient growth models.
Frequently Asked Questions (FAQs)
What is a “good” LTV?
It depends on your industry and business model, but a good LTV to customer acquisition cost ratio is around 3:1 or higher. This means that every dollar you spent on gaining that customer generates $3 in lifetime revenue.
How do I track LTV across platforms?
Consolidate data from various platforms like Realize, Meta, Google, and your CRM into one dashboard. Attribution tools can help with long-term tracking back to original acquisition source.
Does LTV matter for lead generation?
Yes, for lead-gen marketers, lead value functions as your version of LTV. Track total contract value, renewals, or upsells from leads over time to understand their lifetime profitability.
