Performance Max Commercial Framework

The Problem with ROAS

ROAS is a ratio, not a profit figure. The same ROAS can describe very different amounts of spend and contribution. Performance Max responds to the conversion values it receives.

This page asks what contribution remains after product costs, fulfilment, returns and payment fees, and what remains after advertising.

What does the sale contribute?

Compare sales with cost of goods, fulfilment, shipping, returns and payment fees. Advertising is then deducted from that contribution. Break-even depends on the business and the basket, not a universal target.

Agree what the business needs from paid

The right return from Performance Max depends on the business, not on an industry norm. Agree it with finance, taking into account:

• Fixed overheads the channel is expected to help cover
• The profit the business needs to keep
• The value of new customers, where repeat purchase is evidenced
• Cash timing and stock that needs to move

Ask whether reporting reflects product economics

A blended target can hide differences between products. Questions worth asking of any Performance Max account:

• Are products with different contribution visible separately, or blended?
• Does the conversion value Google receives reflect margin, or only revenue?
• What evidence would distinguish branded attribution from new demand?
• Who decides when a product's priority changes, and on what evidence?

The specific targets and structures we use are set per account and are not published.

Review the result with finance

Reconcile attributed sales with recorded product contribution, then account for ad spend. Attribution alone does not establish incrementality.

If contribution after advertising improves, examine cash, product mix and whether the sales were additional before investing more. Account-specific targets and implementation remain private.