If the recent tariffs have changed the effective margins on your products, it’s time to rethink your advertising strategy. Too many merchants seem to have this disconnect between the financial and marketing sides of the business. But marketers should change their advertising targets when cost structures change. Not adapting quickly in response to tariff shifts can kill profitability by overspending or by leaving money on the table.
Many businesses right now (Q2 2025) are adjusting to rapidly changing costs. Products from some companies suddenly got a lot more expensive. This is reshaping supply chains and leading to interesting trade fraud as suppliers route products through other countries to avoid the new taxes. For many merchants this means that some products lines may suddenly be much more expensive while others have stayed the same. But there may be more unexpected changes at any point.
If Your Costs Change, Change Your ROAS Targets
Your advertising targets should be set based on your profit margins. You can spend a bit more to make sales on high margin product lines. You want to be more conservative where margins are thin. We’ve previously written about these dynamics and how you should set your target ROAS levels:
- What is the Best ROAS for Ad Profitability?
- How Return on Ad Spend (ROAS) Bidding Can Kill Profit
- Video: Paid Ads: Strategies During an Economic Downturn
Many companies are scrambling to adjust in response to tariffs, and the unknowns can be intimidating. But there are ways to mitigate the impact, and it’s vital to use them. While you’re adapting to new cost structures, make sure to revisit those target return on ad spend levels and adjust campaign budgets as needed. If you just blindly continue running at previous goals, your profitability will go down.