Your Ads Aren't Broken, Your Margins Are

"We need to fix our Google Ads."

We hear this a lot. Brands come to us with underperforming accounts. They've been through one or two agencies. They've tried different strategies. Nothing seems to work.

Sometimes the problem is the Google Ads. Poor structure, wrong keywords, bad bidding strategy.

Sometimes the problem is not the Google Ads.

The margin check:

If your average product margin is 30%, your average order value is £80, and your blended CPA is £25, let's do the maths:

• Revenue: £80
• Margin: £24 (30%)
• CPA: £25
• Profit before overhead: -£1

No amount of Google Ads optimisation can fix -£1 profit per order.

You can get the CPA down. Maybe to £20. Now you're making £4 per order before overhead. Is that enough?

What margin problems look like:

• "We need 8x ROAS to break even" (your margins are too thin)
• "We can only afford £5 CPAs" (your AOV is too low)
• "We lose money on first orders" (you're assuming repeat purchase that may never come)
• "Competitors are outbidding us" (they have better unit economics)

What actually fixes margin problems:

• Raising prices
• Improving product mix (push high-margin, deprioritise low-margin)
• Reducing returns
• Cutting free shipping thresholds
• Bundle strategies that increase AOV
• Supplier negotiation

None of these are Google Ads problems. All of them affect Google Ads performance.

What we tell clients:

If the economics don't work, we'll tell you. We won't pretend we can optimise our way out of negative unit economics.

Sometimes the answer is "don't hire us yet." Fix the margins first. Then come back.

It's not what most agencies say. It's what honest ones do.