LGG Media manages Google Shopping, Performance Max and Search for ecommerce brands spending $100,000 or more per month. We send profit per order back to Google as the conversion value, so the algorithm can tell a high-margin order from a low-margin one. One retailer went from net losses to a 130% profit ROAS that has held since Q1 2023.
If you pass total order value to Google, the algorithm chases order value. A $200 order at 10% margin and a $200 order at 40% margin look identical to it.
Take two products that each sell for $600. A mid-tier product with a 40% margin and a high-commission financing partner produces $350 in combined profit. A premium product with a 15% margin and a low-commission lender produces $140. A revenue target sees two identical $600 sales. The business sees a $210 difference in profit.
A campaign that optimizes on revenue finds more $600 sales. The business needs more $350-profit sales. The algorithm does exactly what it is told. The instruction is wrong, so the fix is the input.
This is the same problem we solve for lead generation accounts. There, a form fill that never qualifies carries the same weight as a signed contract. In ecommerce, a low-margin order carries the same weight as a high-margin one. Our Google Ads management fixes both the same way.
The method is the same in every industry. The ecommerce version changes what the value is.
Purchase conversions carry a transaction ID so no order counts twice. Enhanced conversions send hashed first-party data. The click ID is stored with the order, so later data can go back to the click that produced it. See the attribution tracking we build.
Campaigns need conversion volume before value bidding is reliable. Google requires at least 15 conversions in the past 30 days for Target ROAS on Shopping and Search. Our accounts run steadier nearer 50, as our guide to value-based bidding explains.
The conversion that trains bidding is a completed, deduplicated order with its profit confirmed. For one retailer, the event waits until both the product margin and the financing commission are confirmed, then sends one verified figure.
Profit per order goes to Google as the conversion value. The target profit ROAS is then set against the business's own economics, including how fixed costs spread across order volume.
Google can report profit. It bids on the conversion value you send.
With conversions with cart data, the purchase tag sends the items sold in each order, matched to the product IDs in your Merchant Center feed. Add the cost of goods sold attribute to the feed, and Google Ads reports gross profit by campaign and product.
Google describes the COGS attribute as a reporting input. A rough estimate or an average is acceptable for that purpose. Google lists profit reporting in Google Ads and automated discounts in Merchant Center as the features it uses COGS data for.
Target ROAS bids against the conversion values in the account. So if bidding is to follow profit, the conversion value itself has to carry profit.
For a BNPL ecommerce retailer, we built an integration with the retailer's ERP. The ERP calculates combined profit per transaction in real time: product margin plus financing commission. A deduplication and hygiene layer validates each figure against the source record, then sends it to Google and Meta as the conversion value. A $220-profit order sends $220. A $350-profit order sends $350.
Operator view: Juan Colicchio describes the path in three steps: a logic layer, then a tracking server, then Google Ads. Margin is calculated in the logic layer, then passed server-side to Google Ads as the conversion value. Google supports importing conversions and their values from your own systems. The build depends on your store, ERP and margin structure. Ask us to build yours →
Most ecommerce spend now runs through Shopping ads, in Standard Shopping or inside Performance Max.
Performance Max runs Shopping ads and other Google inventory from one campaign. Google supports experiments that compare Standard Shopping with Performance Max, so you can test the choice in your own account.
Brand exclusions in Performance Max apply to both Search and Shopping ads. Google's customer lifecycle goals let a campaign bid higher for new customers, or bid only for new customers.
Our Performance Max defaults keep the campaign honest: account-level brand exclusions, a dedicated exact-match brand Search campaign, shared negative lists, and Customer Match exclusions so the campaign cannot pad its numbers by retargeting people who already bought. More in our Performance Max guide.
Operator view: "It depends on the setup. Some accounts bid Shopping and Performance Max on revenue; some bid on gross profit after COGS is accounted for," says Juan Colicchio.
Both setups use the same mechanism: Smart Bidding bids toward the conversion value you define. In a revenue setup, the value is the order total. In a gross-profit setup, it is what the order earns after cost of goods sold.
Both accounts started at $30,000 per month in ad spend. Both are still running.
A national retailer selling automotive products with Buy Now Pay Later financing had stopped advertising after every campaign lost money. Profit-based bidding went live on Google and Meta in Q1 2023. The account turned profitable for the first time and has not dropped below 130% profit ROAS in any month since.
Spend grew from $30,000 to $120,000 per month. The account produces about 710 transactions per month at an average profit of $220 and a customer acquisition cost of about $170, for $156,000 per month in attributed profit. Read the case study →
A specialty retailer with an ecommerce store and about 100 US locations could not connect ad clicks to store sales. A Lightspeed POS integration and a loyalty program with about 60% adoption made in-store attribution possible.
Spend grew from $30,000 to $200,000 per month. The account now attributes $340,000 per month in store revenue and $260,000 in online revenue, for a 300% blended ROAS. Online revenue from ads grew from under $5,000 to $260,000 per month. Read the case study →
Why the retailer's target is 130% and not higher: fixed costs such as warehouse, logistics and customer service spread across every order. At about 710 orders a month, 130% profit ROAS produces more total profit than 150% at 400 orders. A higher target would cut volume below the level where that dilution pays.
For retailers with stores, online conversion data alone underfunds the campaigns that drive store traffic.
In the retail chain above, standard pixel tracking fired inconsistently because of content policies, remarketing audiences were unavailable, and Google Store Visits gave only directional estimates. The loyalty program was the pathway those restrictions could not block, because it runs on the business's own first-party data.
A visitor's website session is tied to the original ad click. When that visitor signs up for or logs in to the loyalty program, the email or phone is matched to the session. A later store purchase on the loyalty account flows from the Lightspeed POS to the attribution server within one hour and is credited to the campaign, ad group and keyword.
For the 40% of customers outside the loyalty program, Store Visits serves as a lower-weighted directional signal across markets.
The chain grew from 41 locations in 2021 to about 100 through two ownership changes. Each new owner ran its own due diligence on the advertising and kept LGG Media.
$100,000 or more per month in ad spend. Margins that differ by product, supplier or financing partner. A store, ERP or POS system that records each order, so profit per order can reach Google. Campaigns that have plateaued on revenue-based bidding.
High-volume stores with low order values and uniform margins, where there is too little variance to beat standard Smart Bidding. A need for measurable improvement within 30 days, because revenue-based bidding needs 60 to 90 days of data.
The failure we see most: scaling on gross revenue instead of gross profit. "The algorithm will often prioritize larger items that may not have the best margins," says Juan Colicchio. Google then favors products that are not the most profitable, and overall margins fall. At that point there is little you can do except isolate certain products in your search campaigns or product feed, which is not the most effective strategy. "Profit bidding effectively prioritizes the bottom line."
The first step is an audit of what the account bids on today and how closely it matches profit.
We review conversion tracking, product feed data and order records together, then connect the store or ERP so each order sends a verified value. The pipeline is tested against historical orders before live spend runs through it. You can run the first part yourself with our Google Ads audit checklist.
Fees are the greater of a percentage of ad spend or a monthly minimum. Scope, price and terms are set in the proposal before anything starts. No annual contracts. The Google Ads account is yours, and the tracking we build on it is yours. See how our Google Ads agency pricing works.
It manages Google Shopping, Performance Max and Search campaigns for online stores. Ours builds conversion tracking that sends profit per order back to Google, then sets the bidding target against that profit.
On profit, where margins differ between products. A revenue target treats two orders of the same size as the same sale, whatever each one earns.
Not directly. COGS in Merchant Center feeds profit reporting. Bidding follows the conversion value you send, so profit bidding needs the profit inside that value.
It depends on margin and fixed costs. The best target is the one that produces the most total profit, which is often lower than the highest ROAS the account could reach.
$100,000 per month in ad spend, for brands with a market big enough to grow 5x and the ambition to capture it.
The greater of a percentage of ad spend or a monthly minimum, set in the proposal before any work starts, with no annual contract. You own the Google Ads account and the tracking.
Google Ads Help: About conversions with cart data, About offline conversion imports, Use a transaction ID to minimize duplicate conversions, About enhanced conversions, Set conversion values, About Target ROAS bidding, About Performance Max campaigns, Set up Standard Shopping campaign vs. Performance Max experiments, Apply brand exclusions to Performance Max or Search campaigns, About customer lifecycle goals, Step 2: Provide cost of goods sold (COGS) feed attribute to report on profit margins, Key tips to driving online sales.
Google Merchant Center Help: Cost of goods sold [cost_of_goods_sold], How Google uses Cost of Goods Sold (COGS) data.
Results are from LGG Media's ecommerce profit attribution and omnichannel retail attribution engagements. The 60 to 90 day data window, the fit criteria and the revenue versus gross-profit observation are LGG Media operator guidance, not Google figures.
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If revenue looks fine but profit is uneven across products, the conversion value reaching Google is the wrong number.
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