Most Google Ads audits stop at ROAS. The best ones go deeper, all the way to profit.
When performance marketers talk about auditing a Google Ads account, the conversation often starts and ends with surface-level optimizations: campaign structure, keywords, and bidding strategy.
But the brands that win long term are those that connect these elements to what really matters: profit, incrementality, and new customer growth.
This article walks you through the exact framework top performance marketers use to analyze Google Ads with a profitability lens, and how Dema helps e-commerce teams move beyond efficiency metrics like ROAS.
1. Start with Structure: The Foundation of All Learning
The way your Google Ads account is structured determines how well the algorithm learns.
A strong structure separates branded and generic keywords into different campaigns.
Why? These represent two completely different parts of the funnel.
- Branded search captures demand that already exists.
- Generic search creates new demand by reaching shoppers who do not yet know your brand.
When you mix them, the algorithm over-invests in branded terms because they convert easily, inflating ROAS and masking the real cost of acquiring new customers.
Action step: Split branded and non-branded campaigns, then evaluate performance separately. If branded performance looks “too good to be true”, it probably is.
For more on how ROAS can mislead, read Why ROAS can’t be trusted.
2. Consolidate to Strengthen the Algorithm
Many accounts suffer from over-segmentation: multiple campaigns divided by product category or audience.
Each campaign then gets too little data, making it hard for machine learning to optimize effectively.
A good rule of thumb: fewer campaigns, more data per campaign. This enables the algorithm to identify patterns and make smarter decisions.
If you really need different strategies for categories, for example because of profit margin differences, do not create separate campaigns. Instead, use feed-based rules or segmentation.
3. Optimize Toward Real Value, Not Vanity Conversions
One of the most common mistakes in Google Ads is optimizing for weak signals such as Add to Cart.
These micro-conversions may generate more data but they do not represent real business value.
The better choice is to optimize toward Purchase or even better, Profit per Purchase.
With Dema, brands can go one step further by connecting their Google Ads optimization directly to GP2 (gross profit after fulfillment costs). This allows marketers to optimize against the true financial impact of each conversion, not just revenue or ROAS.
Learn more about the dangers of revenue-based optimization in Revenue-based measurement is a race to the bottom.
4. Analyze Budget Limits and Adjust ROAS Targets Intelligently
When a campaign is “limited by budget”, it means your daily spend is too low relative to your target.
You have two options:
- Increase the budget if the campaign is profitable.
- If not, increase your Target ROAS so Google spends the same but prioritizes higher-quality traffic.
This simple but often overlooked step can unlock both efficiency and scale without a complete overhaul.
5. Test Brand Bidding to Understand True Incrementality
Should you bid on your own brand name?
It depends, and there is only one way to know: test it.
How to run a brand-bidding test:
- Pause branded campaigns for a few days.
- Measure the drop (if any) in total branded traffic (paid plus organic).
- If organic search captures most of it, you can safely reduce spend.
For brands with strong organic rankings, this can save significant budget without losing conversions. For others, bidding protects visibility, especially if resellers or competitors target your brand terms.
6. Calculate the Share of New vs Returning Customers
Google Ads does not tell you directly how many conversions come from new customers.
However, by uploading your customer list to Google, you can see what percentage of conversions comes from recognized users (returning customers).
From this, you can estimate:
- Share of conversions from new versus existing customers
- Approximate Customer Acquisition Cost (CAC) for new customers
This is a powerful step in moving from platform metrics to commercial reality.
With Dema, this type of analysis becomes automatic: Dema connects order and customer data with ad performance to provide new versus existing customer profitability at the campaign and product level.
7. Move from Revenue to Profit, Then to LTV
The most successful advertisers are evolving from revenue optimization to profit-based optimization, and ultimately to lifetime value (LTV).
Revenue-based metrics reward campaigns that sell expensive products, even if margins are poor.
Profit-based optimization rewards campaigns that drive the most value per euro spent.
The next frontier is combining new customer profit plus LTV to measure sustainable growth.
That is exactly what Dema enables: connecting your Google Ads and product data to feed algorithms smarter targets and generate more accurate profitability insights.
8. The Future of Google Ads Optimization
Google’s algorithms are powerful, but they are only as smart as the data you give them.
The future of optimization belongs to brands that feed algorithms profit-aware and incrementality-informed signals.
This means:
- Clean, unified data
- Profit metrics per SKU and channel
- Incrementality testing to calibrate attribution
Read Marketing Mix Modeling vs Attribution to understand how brands are evolving toward this next level of measurement.