Monday, leadership meeting. The ads report says ROAS 5. Your finance director sorts the month's sales by margin, and the product the ads sold most of turns up near the bottom. So was it a good month or not?
Both things are true at once. A product with a 20% margin needs a ROAS of 5 just to break even, so that month it earned you nothing. That is why we decide how much to put behind each product using its own margin, and leave the store average for the report.
Five questions that show whether an agency looks at each product's margin
Under each one is what we do.
1. Where do you keep each product's margin?
Inside the catalogue itself. The feed (the file listing your products that Google and Meta read) has five free fields called custom labels. We use one of them to record each product's margin band. From there, campaigns can split the products that make money from the ones that don't, and budget goes to the money-makers first.
2. What do you do with products that lose money?
We take them out of campaigns, or only let them bid when their price beats the competition. To know what ROAS each one needs, we work out the minimum profitable ROAS from your real margin, after shipping and returns.
3. How much of what Performance Max sells is people who were already looking for you?
Performance Max is Google's automated campaign type; Advantage+ catalogue ads do something similar on Meta. Both show your products to people who already typed your store's name into the search bar, and then claim the sale. That makes a product look profitable when it isn't. We open the search terms, exclude your brand and look at each product's margin again with what is left.
4. Do you count what a customer is worth when they come back?
Yes, using your store's orders. Some products lose money on the first sale and earn it back because the people who buy them come back for more. We let those bid higher, and check it against what a customer is worth compared with what it costs to win them.
5. What do you check in the feed before raising budget?
Disapproved products in Merchant Center, Google's dashboard where your catalogue lives. A disapproved product doesn't show on Shopping. If it is one of your best-margin lines, you are paying to sell the others. How to find and fix them: the product feed for Google Shopping.
What you can do today, before talking to anyone
Enter your category margins in the catalog ROAS calculator. It shows the ROAS each category needs to break even, so you can see which ones can't carry paid traffic at today's prices. If you want to go further, run your last 90 days of campaign data through the dead spend auditor, which flags money that brought in no sales. Your files never leave your browser.
If the calculator flags red the very products your ads are pushing, request an audit of your accounts. We'll tell you which products to pull first.
Frequently asked questions
How much does it cost to work with you?
It depends on scope: how many accounts and markets, and whether the feed or the measurement needs rebuilding. We quote once we've seen the accounts.
What happens to our history and catalogue if we're moving from another agency?
They stay where they are, in your name. We keep what works so campaigns don't have to learn from scratch.
Which of your products are costing you money?
Request the audit. We cross your campaigns with each product's margin and send back where to start.
Specific actions, product by product.