Reference Guide

Your agency reports platform metrics.
Your CFO needs business outcomes.

This is the translation layer between what Google Ads tells you and what your P&L actually shows. Seven platform metrics, each mapped to the business metric that actually determines whether you're making money.

If your agency can't make these translations, they're managing your ad account - not your advertising investment.

Get Your Metrics Translated POAS vs ROAS Deep Dive

The fundamental problem: Google Ads optimises for conversions. Your business optimises for profit. These are not the same thing. Every metric below shows the gap between what the platform sees and what your business experiences.

The Translations

Seven metrics your CFO wishes your agency understood

Each entry maps a platform metric to its business equivalent, explains what's lost in translation, and provides the formula to calculate the metric that actually matters.

Platform says

ROAS

Business needs

Contribution Margin per Ad Pound

What Return on Ad Spend measures

Revenue generated per pound spent on ads. A 4x ROAS means £4 revenue per £1 spend.

What it misses

COGS, shipping, returns, payment processing, and working capital costs. A 4x ROAS on a 20% margin product means you made £0.80 per pound - before returns eat half of that.

The better metric

POAS (Profit on Ad Spend) - contribution margin generated per pound of ad spend. POAS of 1.0x = break-even. Below 1.0x = losing money regardless of what ROAS says.

POAS = (Revenue − COGS − Shipping − Returns − Processing) ÷ Ad Spend

Example: £100k revenue, £25k ad spend = 4.0x ROAS. After £42k COGS, £8k shipping, £20k returns, £3k processing = £2k profit. True POAS = 0.08x.

Platform says

CPA

Business needs

Customer Acquisition Payback Period

What Cost Per Acquisition measures

Average cost to acquire one conversion. Lower CPA = 'better performance' in platform logic.

What it misses

Whether the acquired customer is actually profitable, how long until you recoup the acquisition cost, and whether repeat purchases justify the investment.

The better metric

CAC Payback Period - how many months of customer spend it takes to recoup the acquisition cost. A £30 CPA on a customer who spends £15/month with 25% margin takes 8 months to pay back.

Payback Months = CPA ÷ (Monthly Revenue per Customer × Contribution Margin %)

Example: CPA: £30. Monthly spend: £15. Margin: 25%. Monthly profit: £3.75. Payback: 8 months. If average customer tenure is 6 months, you never recoup the acquisition cost.

Platform says

Conversion Rate

Business needs

Profitable Conversion Rate

What Conversion Rate measures

Percentage of clicks that result in a purchase. Higher = 'better' in platform logic.

What it misses

Which products converted, at what margin, and whether those conversions will be returned. A 5% conversion rate dominated by low-margin, high-return products is worse than a 2% rate on profitable products.

The better metric

Profit-Weighted Conversion Rate - conversion rate adjusted by contribution margin per conversion. This reveals whether your converting traffic is actually generating profit.

Profit-Weighted CR = Σ(Conversions × Margin) ÷ Total Clicks

Example: 1,000 clicks, 50 conversions (5% CR). But 35 conversions are on products with 8% margin, 15 on products with 40% margin. Profit-weighted value is dramatically lower than headline CR suggests.

Platform says

CTR

Business needs

Qualified Traffic Cost

What Click-Through Rate measures

Percentage of impressions that result in clicks. Higher CTR = 'more relevant' in platform logic.

What it misses

Whether those clicks lead to profitable conversions. High CTR on a misleading ad or a low-margin product means you're paying for traffic that costs you money.

The better metric

Cost per Qualified Click - cost per click that leads to a conversion on a product with positive contribution margin. This separates expensive curiosity clicks from commercially valuable traffic.

CPQC = Total Spend ÷ Clicks That Convert on Positive-Margin Products

Example: 1,000 clicks at £1.50 CPC = £1,500 spend. 40 conversions, but only 15 are on profitable products. CPQC = £100 per qualified click - not the £1.50 you see in the dashboard.

Platform says

AOV

Business needs

Average Contribution per Order

What Average Order Value measures

Average revenue per order. Higher AOV = 'better' in most agency reporting.

What it misses

The margin profile of what's in the basket. A £120 AOV with 15% blended margin generates £18. A £75 AOV with 40% margin generates £30. The smaller order is 67% more profitable.

The better metric

Average Contribution per Order - gross profit per order after COGS, shipping, and expected returns. This is the number your CFO actually cares about.

ACpO = (Revenue − COGS − Shipping − Expected Returns) ÷ Number of Orders

Example: 100 orders, £10k revenue (£100 AOV). After £4.2k COGS, £800 shipping, £2k returns = £3k profit. ACpO = £30. That's the real value of each order your ads drive.

Platform says

Quality Score

Business needs

Cost Efficiency Indicator

What Quality Score measures

Google's assessment of ad relevance, landing page experience, and expected CTR. Scale of 1-10.

What it misses

Quality Score affects your cost per click, but it doesn't determine whether those clicks are commercially valuable. A Quality Score of 9 on a loss-making keyword is worse than a QS of 5 on a profitable one.

The better metric

Profit-adjusted Quality Score - Quality Score weighted by the contribution margin of conversions that keyword drives. This reveals whether you're optimising relevance on the right terms.

High QS on profitable terms = invest. High QS on unprofitable terms = irrelevant. Low QS on profitable terms = fix or restructure.

Example: Keyword A: QS 9, £2k spend, £200 profit. Keyword B: QS 5, £1k spend, £400 profit. The 'worse' keyword generates 4x the profit per pound spent.

Quick Reference

The complete translation table

Platform Metric	→	Business Metric	Key Question
ROAS	→	POAS / Contribution Margin	Am I actually making money?
CPA	→	CAC Payback Period	How long until I recoup acquisition cost?
Conversion Rate	→	Profitable Conversion Rate	Are converting clicks profitable?
Impression Share	→	Market Coverage Cost	What does the next point of visibility cost?
CTR	→	Qualified Traffic Cost	Are my clicks commercially valuable?
AOV	→	Average Contribution per Order	How much profit does each order generate?
Quality Score	→	Cost Efficiency Indicator	Am I efficient on the right terms?

Frequently Asked Questions

Mapping platform metrics to business reality

Platform metrics measure advertising activity - clicks, conversions, revenue attributed to ads. Business outcomes measure commercial results - profit, cash flow, customer lifetime value. The gap exists because platforms don't have access to your COGS, return rates, shipping costs, payment processing fees, or working capital cycle. They report gross revenue as if it equals profit. For low-margin businesses, this gap can mean the difference between apparent success (4x ROAS) and actual loss (-£3,600/month).

No - ROAS is still useful as a directional indicator and for internal consistency checks. But it should never be your primary KPI. Think of ROAS as the speedometer - it tells you how fast you're going, but not whether you're heading in the right direction. POAS is the GPS. Use ROAS for day-to-day monitoring, but make strategic decisions based on POAS and contribution margin.

Start by sharing your COGS data at SKU level, your return rates by category, and your shipping costs per order. If your agency can't (or won't) incorporate this data into their reporting, that tells you something important about whether they're managing your ad account or your advertising investment. Any agency focused on your commercial outcomes will welcome this data.

At minimum: landed COGS per SKU (or per category), average shipping cost per order, return rates by product category, and payment processing fees. Ideally, you'd also have BNPL settlement timelines, restocking costs for returns, and seasonal margin variations. Most ecommerce platforms can export this data - the challenge is connecting it to your Google Ads performance at the product level.

Yes, if you have the data and technical capability. You'd need to: (1) export COGS per SKU from your ERP/platform, (2) match it to Google Ads product-level performance data, (3) calculate contribution margin per conversion, and (4) build a reporting layer that shows POAS alongside ROAS. However, the harder part isn't building the dashboard - it's restructuring your campaigns to actually bid on profit rather than revenue. That requires campaign architecture changes, not just reporting.