The Knowledge Gap at the Top
Your CFO and your PPC agency speak different languages. The CFO thinks in contribution margins, working capital, and cash conversion. The agency thinks in ROAS, CTR, and Quality Score.
This gap is not just a communication problem. It is a commercial risk. Here are five questions your CFO should ask, and why most agencies cannot answer them.
1. What Is Our True Customer Acquisition Cost After Returns?
Most agencies report CPA as ad spend divided by conversions. But a "conversion" that gets returned is not a customer. It is a cost.
The real question: take total ad spend, subtract the value attributable to returning customers, then divide by the number of first-time customers who kept their purchase.
This number is almost always 40-80% higher than the CPA your agency reports. And it is the number your CFO needs to model customer economics.
Why agencies cannot answer it: They do not have access to your returns data, and most have never asked for it.
2. At What Spend Level Do We Hit Negative Marginal Returns?
Every additional pound spent on Google Ads generates diminishing returns. At some point, the marginal cost per acquisition exceeds the marginal contribution margin. Beyond that point, you are paying Google to lose money.
Why agencies cannot answer it: This requires combining ad spend data with SKU-level margin data, shipping costs, and return rates. Most agencies have the ad data but none of the commercial context.
3. How Does Our Ad Spend Interact With Our Cash Conversion Cycle?
Google charges for clicks immediately. Revenue arrives days or weeks later. Returns extend that timeline further. Your CFO needs to know: how much working capital are we floating to fund this level of ad spend?
Why agencies cannot answer it: This is a finance question, not a marketing question. But it has direct implications for how aggressively you should scale.
4. What Percentage of Reported Conversions Are Incremental?
Incremental conversions are sales that would not have happened without the ad. Non-incremental conversions are sales that would have occurred anyway, through organic search, direct traffic, or brand awareness.
If 40% of your reported conversions are non-incremental, your true ROAS is 40% lower than reported.
Why agencies cannot answer it: Incrementality testing is complex, requiring holdout experiments and statistical analysis. Most agencies rely on Google's last-click attribution, which gives them credit for everything.
5. What Is the Commercial Risk of Our Current Campaign Structure?
Risk in Google Ads takes several forms:
- Concentration risk: too much spend on too few products or keywords
- Platform dependency: relying entirely on Google with no diversification
- Data risk: optimising on incomplete data due to consent mode or tracking gaps
- Margin risk: advertising products where contribution margin does not support the CPA
Why agencies cannot answer it: Risk assessment requires commercial judgment, not just platform expertise. Most agencies are hired to manage a platform, not to manage commercial risk.
The Underlying Problem
These questions are not obscure. They are the basic questions any financial professional would ask about a significant line item in the P&L.
The reason most agencies cannot answer them is not incompetence. It is scope. They were hired to manage Google Ads, and they manage Google Ads. The commercial context, the margin data, the cash flow implications, sits outside their remit.
But for a £3m+ brand spending £30,000 or more per month on Google Ads, that commercial context is not optional. It is the difference between scaling profitably and scaling into a cash flow crisis.
Your PPC partner should be able to sit in a room with your CFO and hold a conversation in their language. If they cannot, you do not have a commercial partner. You have a media buyer.