1. Why Profit Optimization Matters

1.1 The Limitation of Revenue-Based Optimization

By default, Google Ads optimizes campaigns based on purchases and their associated revenue. As a result, every purchase is evaluated solely by its revenue—regardless of how profitable it actually is for your business.

For Google's algorithm, two orders with the same revenue are equally valuable, even if they generate very different contribution margins.

Example

From Google's perspective, both orders have the same value.

For the business, however, Order A is significantly more profitable.

This means campaigns can appear successful and continue to scale, even if much of the additional revenue comes from low-margin sales.

1.2 How Profit Optimization Works

With Mable, you can send the actual Contribution Margin 1 (CM1) of each order to Google Ads instead of relying solely on revenue.

This provides Google with a much more accurate signal of the true business value of each conversion.

Rather than learning to maximize revenue alone, Google's algorithm learns to maximize profitable revenue.

1.3 What Are the Benefits?

Optimizing for CM1 can provide several advantages:

• More profitable budget allocation

• Better scalability of profitable campaigns

• Less focus on low-margin products

• Better decision-making through profit-based reporting

• The ability to optimize toward POAS (Profit on Ad Spend) instead of relying solely on ROAS

In addition, profit metrics can be analyzed directly within Google Ads.

This makes it easy to identify which campaigns are actually contributing to business profitability—and which are simply generating high revenue with low contribution margins.

1.4 Which Businesses Benefit Most from Profit Optimization?

Profit optimization is particularly valuable for businesses with:

• Products that have varying profit margins

• Multiple product categories

• Large product catalogs with many SKUs

• Frequent promotions or discounts

• A focus on profitability rather than revenue growth alone

The greater the margin differences across your product portfolio, the greater the potential impact of profit optimization.

For businesses with relatively consistent margins across all products, the primary benefit is often improved reporting and greater transparency into campaign profitability.

2. Prerequisites for Profit Optimization

2.1 Review Your Google Ads Setup

Before switching campaigns to profit optimization, verify that your Google Ads account follows the recommended best practices.

In particular, make sure that:

• Only the Mable Purchase Conversion Action is set as Primary for each store or market.

• All other purchase-derived conversion actions are set to Secondary.

• Only Purchase is configured as the account's default conversion goal.

• Other goal categories such as AddToCart or BeginCheckout are not enabled as additional account-default goals.

A properly configured setup ensures that Google receives consistent optimization signals and attributes conversion values correctly.

For the complete setup guide, see⬇:

Google Ads Best Practice Setup

2.2 Configure Your COGS

Before Mable can calculate and send Contribution Margin 1 (CM1) to Google Ads, your Cost of Goods Sold (COGS) must be configured.

Without COGS data, Mable cannot calculate CM1.

For step-by-step instructions, see⬇:

Configure COGS in Mable

2.3 Create a CM1 Conversion for Google Ads

Once your COGS have been configured, you can create a CM1 AllCustomerPurchase conversion action for Google Ads.

Navigate to:

Optimizations → Event Control → Google Ads

Then, at the bottom of the page, click:

+ Add Custom Mable Event

To create a CM1 conversion equivalent to the standard Purchase conversion while using CM1 as the conversion value, configure the event as follows:

• Trigger: All Customer Purchase

• Conversion Value: CM1

• CV Filter: ≥ 0

After clicking Confirm, Mable automatically creates a new Conversion Action in the Google Ads account selected in the Google Ads Account dropdown within the Mable Dashboard.

The conversion action will typically appear as:

CM1 AllCustomerPurchase – [Store Name] Mable

With every purchase, this conversion sends the actual CM1 value to Google Ads and can then be used for both reporting and campaign optimization.

For detailed instructions, see ⬇:

How to Configure Custom Google Ads Events in Mable

2.4 Create a CM1 Custom Goal

To enable Google Ads to optimize toward your new CM1 conversion, create a dedicated Custom Goal.

This Custom Goal should include the CM1 AllCustomerPurchase conversion you created in the previous step and can then be used as the optimization goal for your campaigns.

For detailed instructions, see ⬇:

How to Create CM1 AllCustomerPurchase Custom Goals in Google Ads

3. Switch Campaigns to Profit Optimization

Once the CM1 AllCustomerPurchase conversion is available in Google Ads, allow it to collect sufficient data before using it for campaign optimization.

⚠ Important:
Before optimizing campaigns for CM1 AllCustomerPurchase, we recommend waiting at least 7 days after the conversion is first sent to Google Ads. This gives Google's algorithm enough data to begin learning from the new optimization signal.

Ideally, the waiting period should match the full click attribution window of the conversion action (30 days by default). In practice, however, waiting approximately 7 days is sufficient for most accounts.

Once sufficient data has been collected, you can begin optimizing campaigns for profit instead of revenue.

3.1 Update the Campaign Conversion Goal

Next, switch the campaign to the CM1 Custom Goal you created earlier.

You can verify which conversion goal a campaign is using in one of two ways:

• Add the Goal column to your campaign overview to see the conversion goal used by every campaign at a glance. https://scribehow.com/o/fl-pFDEPSpia9ZzF-8i-YA/viewer/How_to_Add_the_Goals_and_Bid_Strategy_Type_Columns_in_Google_Ads__GzgMSM3lQvGp-PA_E1IreA?referrer=workspace.

• Alternatively, open the Campaign Settings and review the configured Conversion Goal.

For detailed instructions, see:

How to Switch a Google Ads Campaign to CM1 Purchase Optimization

3.2 Verify Your Bidding Strategy

Profit optimization works best with value-based bidding strategies.

Recommended bidding strategies include:

• Maximize Conversion Value

• Target ROAS

These strategies optimize using the conversion value provided by Mable.

By contrast, bidding strategies focused solely on conversion volume—such as Maximize Conversions or Target CPA—do not take profitability information into account.

4. Review Your Target ROAS for Profit Optimization

If your campaigns use Target ROAS, you should review your target values before switching to CM1 optimization.

This is necessary because the conversion value sent to Google Ads changes after the switch.

Instead of receiving the gross revenue of an order, Google now receives its Contribution Margin 1 (CM1). Since Cost of Goods Sold (COGS) are deducted, CM1 is naturally lower than revenue.

As a result, your previous Target ROAS can no longer be used without adjustment. The original target will now be unrealistically high and may become difficult—or even impossible—for Google's algorithm to achieve.

Example

Before the switch

• Optimization based on Gross Revenue

• Average ROAS = 400%

• Target ROAS = 350% → The algorithm can reliably achieve this target.

After the switch

• Optimization based on CM1

• The average CM1 equals 63.5% of the previous conversion value.

• Average POAS = 63.5% × 400% = 254%

A Target ROAS of 350% is no longer realistic.

If the target is not adjusted, Google's algorithm will gradually reduce campaign spend in an attempt to reach the target. In extreme cases, the campaign may stop serving altogether.

Potential Impact

If you keep your previous Target ROAS unchanged, Google may restrict campaign delivery more aggressively than intended.

Common symptoms include:

• Lower spend

• Fewer impressions

• Fewer clicks

• Lower conversion volume

Recommended Approaches

We recommend one of the following strategies.

Option 1: Recalculate Your Target ROAS

If you can estimate how much the attributed conversion value decreases after switching to CM1, adjust your Target ROAS accordingly.

When comparing conversion values, make sure to select a reporting period that falls entirely after the CM1 AllCustomerPurchase conversion was activated. Only then will both conversion actions be based on the same underlying data.

For detailed instructions, see:

How to Compare Revenue and CM1 Conversion Values in Google Ads

Example

Before the switch

• Value of attributed AllCustomerPurchase conversions (last 14 days): €939,756.08

• Value of attributed CM1 AllCustomerPurchase conversions (last 14 days): €596,509.49

CM1 therefore represents 63.5% of the previous conversion value.

If your previous Target ROAS was 350%, the adjusted target becomes:

350% × 63.5% = 222%

New Target ROAS: approximately 222%

Option 2: Temporarily Remove Your Target ROAS

If it's difficult to estimate the appropriate adjustment—or if Google significantly reduces spend even after lowering your Target ROAS—we recommend the following approach:

• Remove your Target ROAS

• Switch to Maximize Conversion Value

• Allow the campaign to collect data for several weeks

• Set a new Target ROAS once sufficient data has been collected

For major optimization changes, this is often the most stable approach.

5. Best Practice for Switching to Profit Optimization

We recommend not moving your entire budget to profit optimization immediately.

Instead:

• Duplicate your existing campaigns.

• Switch the duplicated campaigns to CM1 AllCustomerPurchase.

• Start with a reduced budget.

This keeps your existing campaigns stable while Google's algorithm learns the new optimization signal.

If your profit metrics improve over time, gradually shift more budget to your CM1 AllCustomerPurchase campaigns.

While it's also possible to update existing campaigns directly, this approach typically results in greater short-term performance fluctuations.

6. Learning Phase & Expectations

After switching to profit optimization, Google needs time to learn which users and products generate the highest profitability.

For most accounts, the learning phase lasts:

• Approximately 1–2 weeks

• Sometimes 2–4 weeks

During this period, it's normal to experience:

• Temporary declines in overall performance

• Fluctuating spend

• Short-term efficiency fluctuations

This is expected.

The algorithm is learning an entirely new optimization signal.

The more conversion data and budget available, the faster this learning process will be completed.

7. Reporting After the Switch

After switching to profit optimization, reporting in Google Ads changes in two important ways.

First, some of Google's standard reporting columns change their meaning.

Second, profit-optimized campaigns should be evaluated using different KPIs than traditional revenue-focused campaigns.

7.1 Interpreting Standard Reporting Columns

After switching campaigns to CM1 AllCustomerPurchase, several familiar Google Ads reporting columns take on a new meaning.

Most importantly:

• Conv. value

• Conv. value / cost (ROAS)

For campaigns optimizing on CM1 AllCustomerPurchase, these columns now represent CM1 rather than revenue.

If your account contains a mix of campaigns optimizing for Gross Revenue and others optimizing for CM1, these standard columns will represent different values depending on the campaign.

As a result, they can no longer be compared directly.

We therefore recommend using the reporting columns provided by Mable. This ensures that all campaigns are measured using the same underlying data and can be compared consistently, regardless of their optimization goal.

7.2 Evaluate Campaigns Using Profit KPIs

Once you've switched to CM1 optimization, campaign performance should be evaluated using profit metrics rather than traditional revenue KPIs.

The most important metrics are:

• CM1

• CM1 %

• POAS

These metrics provide a clear picture of campaign profitability and should become the primary KPIs for evaluating profit-optimized campaigns.

For step-by-step instructions on configuring the recommended reporting columns and analyzing profit KPIs, see ⬇:

Profit Reporting in Google Ads