Who it is for
PPC for e-commerce: ROAS against margin, the feed, and the seasons
A 400% return on ad spend sounds like success, and on a 20% gross margin it is a loss: £400 of revenue carries £80 of margin against £100 of ad spend. E-commerce accounts are managed here from the Growth tier at £399 a month for spend up to £3,000, on the numbers behind ROAS: gross margin by product type, a feed that matches the searches, and a budget calendar that spends into the season rather than after it. Ad spend is paid to Google on your own card.
ROAS is not profit
The break-even return depends on the margin, so each product type gets its own target
| Gross margin | Break-even ROAS on spend alone | What a 400% ROAS means | The target we would set |
|---|---|---|---|
| 20% | 500% | A loss: £80 of margin per £100 spent | 600% or higher, or the product type is excluded from ads |
| 35% | 286% | £140 of margin per £100 spent, before the fee | Around 350%, tightened once the fee is counted |
| 50% | 200% | £200 of margin per £100 spent | 250%, leaving room to bid for volume in season |
| 70% | 143% | Strong; the constraint is volume, not efficiency | 180%, with the budget uncapped while it holds |
Margins go into the feed as a custom label, so the campaigns can bid by what a sale is worth rather than by what it sells for. The monthly report shows margin after ad spend and after our fee, not revenue alone.
The stack
Added in the order that each earns its budget
Retail accounts collect campaign types the way a shed collects tools. Each of these is added when the one before it is working and measured, and dropped when its own line in the report says so.
- 1. The feed and Standard Shopping
- Titles rewritten, product types and margin labels set, Merchant Center clean, three campaigns by priority so brand, model and category searches each meet the right bid.
- 2. Search for brand and category
- An exact-match brand campaign if anyone else bids on your name, and category keywords at phrase match for the searches Shopping does not show for, with the Search Terms read every week.
- 3. Performance Max, brand excluded
- Once orders and values give it something to learn from: asset groups by category, brand exclusions, a channel-split script so its Display spend is visible.
- 4. Customer Match and remarketing
- Past customers uploaded for reorder and exclusion; abandoned baskets followed for a week with a capped frequency and a reason to return.
- 5. Microsoft Shopping
- The same feed into Microsoft Merchant Center, once Google is capped, at a fraction of the CPC.
Seasonality
Spend into the season, not after it
A shop's year is not flat, and a budget that is flat wastes the quiet months and starves the busy ones. We take your sales by month for the last two years, set a budget calendar from it, and raise budgets two to three weeks before the peak so Smart Bidding has volume to learn from when the searches arrive rather than during them. Seasonality adjustments are set in the account for the short spikes, Black Friday, a sale, a launch, so the bidding expects the change instead of reacting to it a week late.
The quiet months are for the feed, the landing pages, the tests that need clean data, and Microsoft. Spending the same in February as in November is the most common expensive habit we find in a retail audit.
Measurement
Purchase values tracked once, with margin behind them
The purchase conversion fires once per order with the order value, through your platform's Google integration or Tag Manager, with Consent Mode in place and enhanced conversions where the platform supports it. A thank-you page that fires on refresh, or a platform tag and a Tag Manager tag both counting the same order, doubles the revenue in the account and teaches target ROAS to spend twice what it should; it is the first thing checked on every retail account.
Refunds and cancellations are adjusted monthly where the platform reports them, so the ROAS in the report is the ROAS on money you kept.
Related
Where this connects
Questions from online shops
What ROAS should I aim for?
The one your margin needs, plus the fee. Divide 100 by your gross margin percentage: at a 25% margin the break-even ROAS is 400%, at 50% it is 200%. Then add our fee to the spend before dividing. A single target for a whole shop is wrong whenever the margins differ, which is why product types get their own.
Should I stop ads in January?
Usually reduce, not stop, and it depends on what you sell. Gyms, diets, storage and tax software have their year in January; gifts do not. The budget calendar is set from your own sales history by month, and the campaigns are told what is coming before it arrives.
Will you manage my Amazon ads too?
No. This site is Google and Microsoft; Amazon advertising is a different auction with different reports and we would rather say so than learn it on your money.
Is one shop per category really enforced?
One business per sector and area on the monthly plans, confirmed personally in the reply. For a shop selling nationally the area is the UK, so it is one shop per product category. Two shops selling garden furniture would be bidding against each other with the same person at both keyboards.
Send us the shop and your margin band. The reply has the break-even ROAS and the fee.
If the account is already running, add the customer ID and the reply also says how much of last quarter's revenue Performance Max claimed from your own brand searches.