More Than Just Facebook: The Truth About Platform-Level ROAS and Budget Allocation in Indian D2C

Hello founders,

In the Indian D2C ecosystem, Meta (Facebook and Instagram) is the undisputed king of acquisition. It’s where most of our budgets go, and often, it’s the primary source of the ROAS figures that dictate our quarterly planning. But if you’ve been following our discussions, you know that the ROAS reported by any ad platform is merely the starting point of the profitability conversation.

The platform-level ROAS is essential for immediate tactical execution, but when you zoom out to strategic budget allocation, the figure is dangerously misleading unless it’s viewed through the lens of post-fulfillment profitability.

Optimizing your ad budget isn't just about maximizing Meta's algorithm; it’s about making sure every rupee spent on that platform leads to the highest possible Net Profit After Fulfillment (NPAF) for your entire business.

The crux of the issue: Founders mistakenly use platform-reported ROAS (like Meta’s) as their primary success metric. This metric only tracks gross revenue against ad spend, ignoring crucial variance in customer quality. In reality, one Meta campaign might generate a 3.0x ROAS with low-quality, high-RTO traffic, while another delivers a 2.5x ROAS with stable, low-RTO prepaid customers. Sustainable budget allocation demands real-time data unification to compare platform-level NPAF, not just gross ROAS, allowing for precise budget shifts toward campaigns and ad sets that deliver actual cash flow.

1. The Siren Song of High Platform ROAS

Every marketing manager lives for the high ROAS number. When Meta shows an ad set hitting 3.5x or 4.0x, the immediate, instinctual reaction is to pour more money into it. This is how the system is designed to work.

However, in the context of Indian D2C, where COD and geography are major factors, chasing the highest ROAS often leads to adverse selection.

Why High Platform ROAS Can Be a Trap:

• Low-Quality Triggers: High ROAS is often generated by campaigns that trigger impulse buying in high-RTO, low-AOV segments (e.g., specific Tier 2 or Tier 3 cities with a strong COD preference).
• The Lookback Window: Platform ROAS is calculated based on a lookback window (often 7 days click or 1-day view). It doesn't factor in that the physical journey of the product and the decision to accept or reject the order happens 7 to 15 days later. By the time the RTO event occurs, the ad platform has already claimed credit for the sale and pushed you to spend more.

The result: Your Meta dashboard looks fantastic, but your working capital is shrinking because you’ve inadvertently scaled a campaign optimized for gross revenue, not net profit.

2. Comparing Apples and Oranges: The Need for NPAF Parity

To truly optimize your platform budget, you need a single, unified lens through which to compare every ad set, campaign, and platform. That lens is NPAF.

Imagine running a comparison across your Meta campaigns:

Campaign / Ad Set

Meta-Reported ROAS

Average RTO %

Net Profit After Fulfillment (NPAF)

Strategic Action

A (Broad Audience)

3.5x

28%

₹80 NPAF

Reduce spend. High RTO makes this inefficient.

B (Lookalike, Prepaid focus)

2.5x

11%

₹210 NPAF

Aggressively Scale. Lower ROAS but delivers 2.6x the profit per order.

C (Retargeting)

4.5x

5%

₹350 NPAF

Maintain/Scale. Highest intent, lowest leakage.

Without NPAF as your benchmark, you would mistakenly allocate the most money to Campaign A and C, while the true workhorse, Campaign B, might be ignored because its ROAS is 'lower'.

Applying the NPAF Filter to Tier and Geo

Furthermore, NPAF must be broken down by geography. Your Meta campaign targeting "All India" is misleading. Your unified data dashboard should show you, in real-time:

• Meta Campaign X in Mumbai (Tier 1): NPAF is positive and high. Scale the geo-targeting here.
• Meta Campaign X in Ranchi (Tier 2): NPAF is negative due to 30%+ RTO. Immediately exclude this city/region from the ad set.

This level of granular control—made possible only by integrating Shopify and logistics data with Meta—is the difference between scaling revenue and scaling cash flow.

3. The Path to Strategic Budget Allocation

Moving away from the tyranny of platform ROAS requires a foundational shift in how you operate:

1. Mandate NPAF as the Core KPI: Your internal marketing team (or your agency) must be incentivized and judged on the NPAF delivered, not the platform's Gross ROAS.
2. Real-Time Feedback Loops: You need an integration that flags the quality (RTO, Prepaid %) of the traffic Meta is driving as fast as possible. This allows the ad manager to pause poor-performing ad sets before a full RTO cycle completes.
3. Optimize for Quality over Quantity: Your entire optimization strategy should shift from finding the cheapest conversion to finding the most reliable and profitable conversion, even if the Cost Per Acquisition (CPA) is slightly higher initially. The long-term NPAF will always justify this decision.

In the competitive Indian D2C landscape, platform efficiency is table stakes. True mastery comes from measuring the impact of that efficiency on your bottom line after the product has been delivered and accepted. Stop letting Meta tell you how successful you are; let your bank balance, informed by unified data, be the judge.