Revenue optimisation is the default in Google Ads. Set a ROAS target, let Smart Bidding find conversions, report on revenue growth. It is how most accounts operate.
But revenue optimisation and profit optimisation are not the same thing. In many cases, they are directly opposed.
The Revenue Trap
When you optimise for revenue, the algorithm will find revenue. It has no visibility into your margins, return rates, or customer economics. It sees a conversion value and optimises toward it.
This creates predictable problems:
- Low-margin products receive disproportionate spend because they still convert
- High-return categories look attractive until you calculate net revenue
- Customer acquisition and repeat purchase are treated identically
- Discounted items receive the same priority as full-price
The algorithm is doing exactly what you asked. The problem is what you asked for.
The Margin Disconnect
I audited an account last year where the team had spent 18 months aggressively scaling revenue. They succeeded. Revenue from Google Ads more than doubled.
When we analysed profit contribution, it had grown by just 12%. The additional revenue was almost entirely on low-margin products that the algorithm had learned to favour. They were buying revenue, not profit.
Why Agencies Default to Revenue
Revenue is easier to optimise for and easier to report on. It is a single number that goes up or down. Growth looks like success.
Profit requires margin data, which many agencies do not have access to. It requires nuanced reporting that explains why revenue might be down while profit is up. It requires harder conversations with clients.
So agencies default to revenue targets and revenue reporting. It is simpler, even if it is not what clients actually need.
The Profit-First Alternative
A profit-led approach to Google Ads starts with different inputs:
- Margin data at SKU or category level
- Return rate adjustments to conversion value
- Customer lifetime value weighting where appropriate
- Clear segmentation between profitable and unprofitable products
This information flows into bidding strategy, campaign structure, and reporting. The algorithm optimises for what matters, not for a proxy metric that may or may not correlate with value.
The Founder Question
For founders and finance leaders, the question is straightforward: is your paid media generating profit, or is it generating activity that looks like profit?
A commercial audit will answer that question. The answer is not always comfortable, but it is always useful.