By integrating margin tracking into conversion tracking, you get valuable insights into the actual margins of your campaigns and products in the Google Ads interface. This information enables you to make targeted and strategic decisions for both bid optimization and the entire account structure . You can now no longer evaluate campaigns solely based on sales, but also manage them specifically based on profitability.
Let’s look at two campaigns in one example:
campaigns with margin data
Let's say we actually aim for a target ROAS of 1000%. Then Campaign 1 would have exceeded our target of 1000% with a ROAS of 1300%, while Campaign 2 would have fallen short at 900%. However, if you also take into account the margin data, you can see that Campaign 2 has a higher margin (22%) than Campaign 1 (15%). Accordingly, it would make sense to invest more in Campaign 2 in percentage terms, as the percentage Google Ads profit is also higher here (11% vs. 8%).
There are decisive advantages , especially if you store margin tracking as primary tracking , i.e. as the main data basis, for bid optimization . This is because bid strategies can then use the margin data for optimization not only at campaign level, but also on a product-specific basis. This way, Google can also recognize within campaigns which products cambodia phone number data have a higher margin and automatically direct the advertising budget to where the largest margin is to be expected. Cross-selling is then also not a problem for Google , because the margin of the entire shopping cart achieved is taken into account and not just the margin of the advertised product. This means that products with a low margin are also advertised when they are bought together with products with a high margin.
With margin-based targeting, you can optimize your campaigns to maximize your absolute Google Ads profit . You achieve this when the difference between the total margin of your sold products and the Google Ads costs is greatest . Why is this so important? Maximizing Google Ads profit means that you not only generate high sales, but also use your advertising spend efficiently. You avoid spending unnecessary amounts of budget on products with low margins and instead focus on the products that bring you the highest profit after deducting advertising costs.
Determine maximum profit in Google Ads
In this graphic you can see how the margin changes as Google Ads costs increase and how you can achieve maximum profit with the right bid target . The red line shows the costs, the blue line the margin. At some point the costs increase so much that they "eat up" the margin again - at this point you reach the maximum profit, which is marked by the arrow. The maximum profit is reached where the difference between the margin and Google Ads costs is greatest . And this is exactly the point that you need to reach with margin control. This way you use your advertising budget effectively and increase the profitability of your online shop in the long term.