Grow your webshop.
Know what sales leave behind.
More orders should support your business. KOAT helps you plan and manage e-commerce advertising with attention to product margins, reliable measurement and the cost of acquiring customers.
How do you assess webshop advertising on profit?
Start with net sales after discounts, refunds and applicable sales taxes. Subtract product costs and variable order costs to calculate contribution before advertising. Then subtract media spend and the other campaign costs you include in your assessment. Review this alongside your store records, attribution limits and the contribution needed to cover overhead and support profit.
Three questions before you scale.
What can each order contribute?
Product cost, discounts, delivery subsidies, payment fees and returns affect how much is available for acquisition and the rest of your business.
Are sales values trustworthy?
Check purchase events, order identifiers, currency and reported values. Compare advertising reports with your webshop’s actual order records.
Can the store support growth?
Stock, delivery, mobile checkout and customer support influence whether additional demand becomes a sustainable business opportunity.
A strong ROAS needs context.
Return on ad spend, or ROAS, compares attributed conversion value with media spend. When that value represents revenue, the ratio does not account for the costs of selling and delivering the products. Two campaigns with the same ROAS can therefore have different commercial outcomes.
| Measure | What it shows | What it leaves out |
|---|---|---|
| Revenue ROAS | Attributed revenue divided by media spend. | Product costs, order costs, other campaign costs and whether sales were incremental. |
| Gross profit | Net sales minus cost of goods sold. | Other order costs, advertising and overhead, depending on the accounting definition used. |
| Contribution before advertising | Net sales minus product costs and the variable order costs included in your model. | Advertising, other campaign costs and fixed overhead. |
| Contribution after campaign costs | What remains after subtracting media spend and the defined additional campaign costs. | Any overhead, taxes or other expenses outside that model. |
| Customer acquisition cost | Defined acquisition costs divided by acquired new customers. | Customer value and future profitability unless assessed alongside them. |
Use a consistent cost model.
Agree which revenues and expenses belong in the calculation. Keep tax treatment, shipping revenue, refunds and cost periods consistent. A positive campaign contribution still needs to help cover the expenses of running the business.
What does a 4× ROAS leave behind?
This hypothetical example uses €10,000 in net sales attributed to a campaign. It assumes sales and costs cover the same period, with discounts and refunds already reflected. These figures are an explanation, not KOAT pricing or a forecast.
| Item | Amount | Meaning |
|---|---|---|
| Net sales | €10,000 | Revenue after discounts, refunds and applicable sales taxes. |
| Product costs | − €5,000 | Cost of the products sold. |
| Other variable order costs | − €1,500 | Included fulfilment, payment and other variable costs. |
| Contribution before advertising | €3,500 | A 35% contribution margin on net sales. |
| Media spend | − €2,500 | €10,000 ÷ €2,500 = 4× revenue ROAS. |
| Other campaign costs | − €600 | Illustrative management, creative or tool costs included here. |
| Contribution after campaign costs | €400 | Remaining before fixed overhead and other excluded expenses. |
The margin changes the answer.
At a 35% contribution margin, the media-only break-even revenue ROAS is approximately 2.86×: 1 ÷ 0.35. Including the €600 in other campaign costs, €2,500 in media spend requires approximately €8,857 in net sales to cover those costs—about 3.54× revenue ROAS. Both thresholds exclude fixed overhead and a desired profit buffer.
At a 20% contribution margin, the same €10,000 in sales would leave €2,000 before campaign costs and a €1,100 shortfall after them. The reported 4× ROAS would remain unchanged.
Shopping and Performance Max.
Shopping ads use product information supplied through Merchant Center. Performance Max combines your goals, assets and settings with Google’s automation across available Google Ads inventory. For a webshop, the product feed can form part of that campaign.
Present relevant products
Build the campaign around accurate product information and a clear commercial plan for the items you want to promote. Review product eligibility and sales performance.
Manage the inputs and goals
Review conversion goals, product selection, creative, budget and the campaign’s available settings. Assess the results against the store’s economics.
Choose with a reason
Campaign choice depends on your catalogue, market, measurement and objectives. Automation needs reliable inputs and ongoing commercial review.
A conversion value is only as useful as its definition.
If a purchase is reported with revenue as its value, that number represents revenue. Do not interpret it as profit. Document what the campaign is optimising towards and assess the financial result separately where needed.
Prepare the catalogue for advertising.
Product information should accurately describe what someone can buy. Price, availability, product variants, images and delivery information need attention, with consistency between the submitted data and the webshop.
We also review the journey after the click: product explanation, mobile usability, delivery expectations and checkout. These factors help identify where advertising demand is being lost.
Catalogue checks can include
- Product titles, identifiers and variant information.
- Price and availability consistency.
- Image quality and relevant product details.
- Delivery and return information.
- Merchant Center issues affecting product eligibility.
- Stock and margin information for product prioritisation.
What KOAT can help you improve.
Targets grounded in margins
Define acceptable acquisition costs using your product mix, order economics and the contribution your business needs.
Clearer product information
Review feed quality, relevant product grouping and issues that affect the agreed advertising catalogue.
A purposeful setup
Plan Shopping or Performance Max around the available budget, product priorities, market and measurement.
More dependable purchase data
Check the agreed purchase tracking and investigate duplicate events, unexpected values or differences from store records.
Fewer unanswered purchase questions
Identify relevant improvements to product pages and checkout. Agree on implementation work separately where it extends the campaign scope.
Commercially useful reviews
Discuss sales, costs, product mix and measurement limits, then use the findings to guide budget and campaign changes.
Connect ad reports with store records.
Compare reported purchases with actual orders, allowing for attribution windows, reporting delays and differences in measurement. Keep cancellations and refunds visible in the commercial assessment.
Google’s conversions with cart data can provide additional sales reporting. Combined with cost-of-goods-sold data in Merchant Center, it can also support gross profit metrics. Availability and setup need to be checked for your account.
Those gross profit metrics do not replace a full business profit calculation. Other order costs, advertising, management and overhead still need to be considered.
Questions worth resolving
- Does the purchase event fire once for each order?
- Are currency and value definitions consistent?
- Are taxes, delivery and discounts treated consistently?
- How are refunds and cancellations reflected?
- Can new and returning customers be assessed reliably?
- Which sales are credited by more than one platform?
Avoid adding platform-attributed sales together as though each platform has credited a different order.
Scale with evidence and capacity.
Review product mix, contribution, stock and the time needed for orders to settle before increasing spend. An average result can hide low-margin products, expensive returns or reliance on existing customer demand.
Attributed sales show how a reporting system assigns credit. They do not establish how many extra sales advertising caused. Where practical, a suitable experiment can help assess incremental impact.
Treat future customer value carefully.
Repeat purchases may justify a different acquisition target, but use observed customer cohorts and contribution after repeat-order costs. Specify the time horizon, uncertainty and cash needed to fund acquisition.
A hoped-for repeat purchase should not be counted as confirmed future profit.
Assess. Prepare. Manage. Review.
- 01
Understand the economics
Review the catalogue, margins, order costs, sales history and available advertising budget.
- 02
Prepare the foundations
Check the feed, measurement and purchase journey. Define the work required before launch.
- 03
Launch and manage
Build the agreed campaigns and review delivery, spend, product performance and reported sales.
- 04
Review the contribution
Combine campaign reporting with business data to guide the next improvements and budget decisions.
What does webshop advertising cost?
The scope depends on your catalogue, markets, existing setup, feed requirements, creative and ongoing management. Advertising spend is a separate budget item.
Tracking repairs, new product page work or advanced reporting can add preparation costs. We review the requirements and clarify the proposed scope before starting.
Bring these to the first conversation
- Your webshop and target markets.
- Your catalogue and priority product categories.
- Product margins and relevant order costs.
- Google Ads and Merchant Center access, if available.
- Sales, return and customer data you can share.
- Your budget, stock constraints and growth objectives.
E-commerce advertising explained.
How do I know whether webshop ads are profitable?
Calculate contribution after product costs, variable order costs and defined campaign costs. Compare the result with actual store data and the contribution needed for overhead and profit. Keep attribution uncertainty visible.
What is a good ROAS for my webshop?
It depends on your contribution margin, campaign costs and business goals. A store with lower margins generally needs more revenue per euro of advertising to cover the same costs. There is no universal profitable ROAS.
Are Shopping campaigns and Performance Max the same?
No. Shopping ads are product-based ads that use Merchant Center information. Performance Max is a campaign type covering available Google Ads inventory and can include Shopping ads when connected to a product catalogue.
Does Performance Max optimise for profit automatically?
Do not assume that it does. Review the conversion goals and values supplied to the campaign. Revenue values do not include every cost of generating and fulfilling a sale. Profit assessment requires the relevant cost information.
Should every product be advertised?
Review products according to margin, stock, demand and commercial priorities. Some products may need different treatment or should wait until feed, pricing or purchase experience issues are resolved.
How do returns affect the result?
Returns can reduce net sales and create additional handling costs. Include the financial impact in your assessment and allow enough time for the relevant return period. Avoid judging solely from the initial purchase value.
Can Google Ads report product gross profit?
With an appropriate conversions-with-cart-data setup and cost-of-goods-sold information, Google supports additional gross profit reporting. Check data completeness and setup requirements. Gross profit is different from profit after all campaign and business expenses.
Why do Google Ads and my webshop show different sales?
They measure different things. Attribution, reporting periods, delays, consent and tracking can all affect the comparison. Investigate unexpected differences and use store records for the actual order history.
When should I increase the advertising budget?
Increase it when the evidence supports your commercial target and the store can handle more demand. Review the outcome after changes: the next increment of spend may perform differently from the existing budget.
Can you guarantee profitable growth?
No. Results depend on product economics, demand, competition, measurement and the purchase experience. We define the work and review the evidence so decisions are grounded in your business.
Understand the numbers.
Build a clearer growth plan.
Let’s review your catalogue, advertising setup and order economics, then define the next steps for your webshop.
