The Commercial Viability Audit

Most agencies assume demand exists. They take your brief, run the campaigns, and bill monthly. Whether those campaigns can actually generate profit at your margin structure is your problem, not theirs.

We do something different. Before we onboard a client, we run what we call a Commercial Viability Audit. It is not a PPC audit; it is a reality check on whether paid acquisition makes commercial sense for your business right now.

When the timing, economics or cash runway do not support an engagement, we say so. That is a decision about fit, not a judgement on the business.

When Google Ads Is Not the First Fix

Google Ads is not a growth lever. It is an amplifier. If your unit economics are healthy, it amplifies profit. If they are broken, it amplifies losses.

The problem is that most brands treat Google Ads as a fix for underlying business problems. Revenue is flat, so they increase spend. Margins are thin, so they chase volume. The result is usually the same: more revenue, less profit, shorter runway.

The Runway Test

Google Ads needs useful conversion data and time to evaluate changes. The time required varies by account and cannot be promised in advance.

Consider what the business can afford to invest while results remain uncertain, without treating an arbitrary testing period as a qualification rule.

How to Know If Your Unit Economics Are Broken

Before you spend £1 on Google Ads, calculate your breakeven ROAS. This is the return on ad spend required just to cover your costs, before making any profit.

If your contribution margin is 50%, your breakeven ROAS is 2.0. If your margin is 30%, your breakeven is 3.3. If your margin is 20%, your breakeven is 5.0.

Now compare that to realistic Google Ads performance in your category. If the achievable ROAS is lower than your breakeven, the maths does not work. Scaling will only scale the losses.

What We Look for in the Viability Audit

• Contribution margin by SKU: Not blended averages. Actual margins on the products you will advertise.
• Return rate by category: A 4.0 ROAS means nothing if 30% of orders come back. (More on this in ourreturns analysis.)
• Payment terms and cash flow: If you pay suppliers in 30 days but customers pay you in 60, Google Ads can break your working capital.
• Existing channel performance: If organic and email are struggling, paid will not save you. It will expose the same problems faster.
• Competitive landscape: CPCs in your category determine what is economically possible.

Why Turning Away Business Is Good Business

Agencies that take every client end up with churn problems. Clients that should not have been on paid advertising leave disappointed, blame the agency, and tell everyone.

We would rather be clear about fit and timing than recommend spend that the product economics or cash position cannot support.

When we say no, we explain why. Sometimes it is fixable: raise prices, improve margins, build more runway. Sometimes it is timing: come back in six months when the fundamentals are stronger.

Before You Spend £1

If you are considering scaling Google Ads, start with these questions:

1. 1. What is my real contribution margin?Not gross margin. Contribution margin after COGS, shipping, payment processing, and returns.
2. 2. What ROAS do I need to break even?Use the formula above. Be honest about the number.
3. 3. Is that ROAS achievable in my category?Compare the requirement with your own observed results and the uncertainty around future demand, not an unsupported industry average.
4. 4. What is my cash runway? Decide how much uncertainty the business can carry before committing more spend.

If the answers are uncomfortable, that discomfort is valuable. Better to know now than after £50k of unprofitable spend.