The actual KPIs your
Google Ads agency should
focus on (hint: not ROAS)
Every week your performance marketing agency pulls up a swanky report and points to green ROAS charts, raving about "strong performance" — meanwhile your cash flow is tightening and margin is compressing.
That flash sale looks great on the surface. Top-line looks great in fact. But once you factor in the discount %, returns, shipping and fulfilment — suddenly you're in the red. Something the charts don't show.
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An agency reporting solely on ROAS isn't best equipped to grow your business. The metrics that actually matter live in your P&L — not the dashboard.
Why ROAS-centric reporting?
The harsh reality goes two ways.
They're incentivised by your ad spend
That clause in your contract about mark-up or, worse, rev share means the agency — no matter how well-intentioned — still has an incentive to get you to spend more, even at the expense of your own profit. Whether they're aware of it or not.
You'd find a lot more questions about margins, repeat rate, buying cycle and overheads if it were a profit share. That's for sure.
It's easier to form narratives with ROAS
In reality, seasonality, macro-events, unit-economics, price vs market, offer strength and channel role in a brand's marketing ecosystem are a lot harder to explain, challenge and improve — yet they unlock far greater results when explored properly.
It's a lot easier to stay at surface level and report your efficiency of spend in relation to top-line revenue on a weekly basis.
Why ROAS is not the solution
"Adjust your spend 200% and get the same/similar ROAS." Sounds great. Juniors or CMOs hearing this will think it's a no-brainer. Why are we not scaling if we can?
If the ROAS target is exceeded, the campaign enters significantly more expensive auctions — trying to convert those left in the audience pool at that efficiency level. If it can't hit the target, the campaign throttles its own spend to preserve the ratio.
ROAS acts as a "warmth dial." The lower your tROAS target, the colder the audience — and the less likely they are to convert. These are where your new customers live, and new customers are what actually grow your business.
A higher tROAS means you're telling Google to hit a very difficult efficiency ratio, especially at scale. To meet it, Google shows your ads to extremely warm users — website visitors, add-to-carts, begin-checkouts, and crucially — existing customers. The same customers you've already won.
Google's own attribution modelling has significant limitations due to growing privacy measures. More and more early touchpoints in user journeys are blocked or stripped from conversion tracking — or the whole journey is unconsented and you're over-reliant on Consent Mode to model it. The result: lower-funnel end touchpoints are attributed the sale, prospecting campaigns are under-evaluated, your agency increases the ROAS target, and the cycle continues — making the dashboard green whilst your business stagnates.
Interactive
The solution
Shift your KPIs to these four metrics. Each one connects your ad account directly to your P&L.
Closing thoughts
You won't be surprised to learn that none of these metrics feature in Google's Skillshop courses. They're not easy KPIs to measure yourself against — and they certainly present more challenging conversations with stakeholders than "ROAS is good, spend more."
But by focusing on NCAC, contribution margin, CLTV and payback windows — alongside new customer volume — you start to align your marketing KPIs to the actual business P&L.
That shift moves you away from agency waffle and obscurity, and into P&L clarity.