What questions should a Google Ads agency ask before starting?

A good agency should ask about product margins, return rates, cash flow cycles, seasonal stock patterns, lifetime customer value, and who else is involved in budget decisions. These questions show they understand ecommerce as a commercial operation, not just a platform to manage.

How do I know if my Google Ads agency is commercially literate?

Ask them to explain how they set bid targets. If the answer involves your margin data, cash flow position, and customer lifetime value, they are commercially literate. If it is purely based on ROAS or CPA from the Google Ads dashboard, they are managing a platform, not a commercial outcome.

Agency Evaluation

The questions your agency should be asking you

Everyone talks about "questions to ask your agency." Here is the other side: the questions a commercially literate agency should be proactively asking you.

If your current agency has never asked any of these, that tells you something about how they make decisions with your money.

Question 1

"What are your product margins by category?"

Without margin data, every bidding decision is based on revenue alone. A 4x ROAS on a 25% margin product is break-even. A 2.5x ROAS on a 60% margin product is highly profitable. Your agency needs this to make intelligent decisions.

Red flag

They have never asked, or they say 'we just need your ROAS target'

Good sign

They asked for COGS data before the first campaign went live

Question 2

"What is your return rate by product category?"

In fashion, return rates of 30-40% are normal. If your agency is optimising for gross revenue without accounting for returns, they are celebrating sales that will be refunded next week. The real cost of a sale includes the return that follows it.

Red flag

They report on gross revenue and have never mentioned returns

Good sign

They factor net revenue into performance reporting

Question 3

"Which products should we not be pushing?"

Not every product in your catalogue should receive ad spend. End-of-line stock, products with known quality issues, items with fulfilment problems, or products where you are out of stock in key sizes. Your agency should be asking what not to promote.

Red flag

Every product gets equal treatment in a single PMax campaign

Good sign

They work with you on SKU exclusion lists and seasonal adjustments

Question 4

"What does your cash flow cycle look like?"

If you pay suppliers on 30-day terms, sell on 60-day payment plans, and your agency is scaling spend aggressively, you could be profitable on paper and cash-negative in reality. Smart agencies understand that timing matters, not just totals.

Red flag

They have never discussed payment terms, stock cycles, or cash flow

Good sign

They adjust spend pacing based on your cash position and stock availability

Question 5

"What does a new customer cost you beyond the ad click?"

Customer acquisition cost is not just the CPA from Google Ads. It includes fulfilment, packaging, payment processing fees, customer service, and the return risk. Your agency should know the fully-loaded acquisition cost to set meaningful targets.

Red flag

They optimise to a CPA that only accounts for ad spend

Good sign

They ask about fully-loaded costs and use contribution margin as the target

Question 6

"What is the lifetime value of your customers by channel?"

A customer acquired via Google Shopping who never returns is worth less than one acquired via branded search who purchases quarterly. If your agency is not asking about repeat purchase rates, they are optimising for one-time transactions.

Red flag

They have never discussed LTV, repeat rates, or cohort analysis

Good sign

They adjust allowable CPA based on expected customer lifetime value

Question 7

"What are your seasonal patterns and stock constraints?"

Scaling spend into a product that is about to go out of stock wastes money. Pulling back spend during your peak trading period loses revenue. Your agency should be asking about your trading calendar, not just reacting to performance data.

Red flag

They only learn about seasonality after performance drops

Good sign

They request your stock forecasts and trading calendar quarterly

Question 8

"Who else is involved in the buying decision?"

If finance signs off on budgets, your agency should understand what finance cares about. If the MD reviews monthly performance, the reporting needs to speak their language. Most agency-client breakdowns happen because the agency only talks to marketing.

Red flag

They have never asked who else sees the reports or approves budgets

Good sign

They offer to present to your finance team or board in commercial terms

Quick scorecard

0-2 questions asked

Your agency is managing a platform, not a commercial outcome. They are making decisions without the information needed to make them well.

3-5 questions asked

Better than most, but there are meaningful gaps in their commercial understanding. Worth a conversation about what else they need from you.

6-8 questions asked

Your agency understands that Google Ads management is a commercial function, not just a technical one. They are likely making better decisions because of it.

We ask all eight. Before we start.

Because the quality of the questions determines the quality of the decisions.

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