How to Bid on Profit Instead of Revenue in Google Ads
Four routes to pass profit margin instead of revenue to Google Ads Smart Bidding, which account each one fits, and a worked example of resetting a ROAS target.
On this page
- The four routes side by side
- Why the margin should come from your own systems
- What cart data with COGS does, and where it stops
- Is there a Maximize profit bid strategy?
- Where conversion value rules help with margin
- Returns are an adjustment, and they need a transaction ID
- Resetting a revenue ROAS target to a profit target
- What changes in your reports
- Which route fits which account
- Sources
To pass profit margin instead of revenue to Google Ads, change the number your purchase conversion reports: calculate each order's margin in your own systems and send that figure as the conversion value. Smart Bidding then pursues whatever the number measures. Our position, after reading Google's current help pages, is that this first-party route is the one to build on. Cart data with cost of goods sold, conversion value rules and conversion adjustments each do a narrower job, and each works better once the base value already means profit.
Google states the premise plainly. The Maximize conversion value page in Google Ads Help says: "You define the value that you want to maximize, such as sales revenue or profit margins, when you set up conversion tracking for your account."
The four routes side by side
| Route | What it changes | What it needs | Best fit |
|---|---|---|---|
| Margin as the conversion value | The value Smart Bidding bids on, order by order | Cost data available when the order is recorded | Any account on value-based bidding, with or without a product feed |
| Cart data with COGS | Reporting on items sold, revenue and gross profit | A linked Merchant Center account, matching item IDs, a cost attribute in the feed | Retailers who want product-level profit reports |
| Conversion value rules | Values by audience, location or device | No change to tagging code | Margin that varies by customer type or region |
| Conversion adjustments | The value or the count after the sale | A transaction ID on the original online conversion | Stores with a meaningful return rate |
Why the margin should come from your own systems
Feeding profit instead of revenue to Google Ads Smart Bidding is a first-party data job before it is a bidding job. The same Google Ads Help page lists conversion tracking with transaction-specific values as a prerequisite for Maximize conversion value, and it leaves the meaning of that value to you. We read that freedom as the advantage. Your order system can subtract product cost, shipping and payment fees to reach a contribution margin per order, while the gross profit Google calculates stops at revenue minus cost of goods.
Decide once which costs sit inside the value and write the definition down, because every target you set later inherits it. Compute the figure on your server where you can, since a margin calculated in the browser sits in the page source for any visitor to read. Our first-party data playbook is a further resource on the data side.
What cart data with COGS does, and where it stops
Google Ads profit bidding with cart data is narrower than the phrase suggests, because the documented feature is profit reporting. Google Ads Help defines it this way: "Conversions with cart data is an extension to conversion tracking on your website or app." The tag passes the products sold in each transaction, and the page continues: "By combining this data with the cost of goods sold (COGS) from your Merchant Center feed, Google Ads can generate additional metrics based on gross profit." Only items from a Merchant Center account linked to the Google Ads account are processed, and item IDs in the tag must exactly match the id attribute in the feed.
The cost side is loose by design. Google Merchant Center Help says of the cost_of_goods_sold attribute: "The information that you share with Google regarding COGS is for reporting purposes and does not need to be exact." The page lists the attribute as optional for each product and as required for automated discounts and dynamic promotions, and where a product's cost varies Google recommends providing an average.
Bidding on that gross profit was a beta in the most recent Google page we found on the subject. A holiday guidance page in Google Ads Help, dated August 27, 2024, reads: "To prioritize ad placements that have higher profitability, optimize to profit goals (currently in beta testing) in Performance Max and Standard Shopping campaigns." The same page says customers who use gross profit optimization in Smart Bidding see, on average, a 15% uplift in campaign profit compared with revenue-only bidding, sourced to Google internal data for Shopping campaigns globally in 2023, with profit defined as revenue minus COGS. That figure is Google measuring its own product. As of October 7, 2026, we found no Help article that documents how to turn the beta on or that announces general availability. Ask your Google representative about access, and keep it out of the plan until you have it.
Is there a Maximize profit bid strategy?
We found no "Maximize profit" Smart Bidding strategy in Google Ads, and no bid strategy that takes COGS as a setting. The Smart Bidding overview in Google Ads Help names four: "Target CPA, Target ROAS, Maximize conversions, and Maximize conversion value are all Smart Bidding strategies." Its goal table pairs the business goal "Increase profit" with Target ROAS and Maximize conversion value. Profit therefore enters through the value you report, and the strategy stays the same. One labeling note for anyone following older guides: starting in June 2026, the page says, "Maximize conversion value with a Target ROAS" is changing to "Target ROAS", and the underlying bidding behavior remains exactly the same.
Where conversion value rules help with margin
Conversion value rules bring profit margin into Google Ads value-based bidding along three dimensions: audience, geographic location and device. Google Ads Help offers margin as a use case, describing rules as a way to provide additional value information, "for example, different margins for different types of users, or lifetime value considerations", and it lists working without a change to tagging code as a benefit. We found no product, category or SKU condition in that list. A fourth entry reads "No condition (for select conversion goals)", and the description beside it covers rules "that only apply to store visit or store sales conversion actions."
Rules therefore suit margin that follows the customer: a wholesale audience on thinner margins, or a region where freight eats into the order. On that list, a rule has no way to tell a 25% product from a 62.5% one. Google adds its own caution on the same page, that Smart Bidding already uses signals like geography, device and first-party audience lists.
Returns are an adjustment, and they need a transaction ID
A profit value recorded at checkout is still wrong for every order that comes back. Google Ads Help documents two fixes. Restating changes the conversion value and leaves the count alone, and it affects the Conv. value and All Conv. value columns and ROAS bid strategies. Retracting removes the conversion, sets its value to 0.00, and affects CPA and ROAS bid strategies. Online conversions can be adjusted only if a transaction ID was used with the transaction, and a retracted conversion cannot be adjusted further. When the value you report is margin, restate a partial return to the margin of what the customer kept. Uploading the revenue figure out of habit would overwrite profit with revenue on that order.
Resetting a revenue ROAS target to a profit target
To optimize for profit in Google Ads with a first-party conversion value, restate the target as well, because a target written for revenue is far too strict for a value that is a fraction of revenue. The conversion is one multiplication: profit target equals revenue target times blended margin. The store below is hypothetical, and every figure in the table is an assumption for illustration.
| Hypothetical store | Line A | Line B | Account |
|---|---|---|---|
| Ad spend | $10,000 | $10,000 | $20,000 |
| Attributed revenue | $60,000 | $40,000 | $100,000 |
| Margin (assumed) | 25% | 62.5% | 40% |
| Margin sent as value | $15,000 | $25,000 | $40,000 |
| Revenue ROAS | 600% | 400% | 500% |
| Profit ROAS | 150% | 250% | 200% |
The account ran a 500% target on revenue. At a 40% blended margin the equivalent profit target is 200%, which is the same account-level efficiency stated in a different unit. At 100% the margin exactly covers ad spend, so break-even is easier to read than it is in revenue ROAS; our ROAS calculator is a further resource. The more useful result sits in the columns. On revenue, Line A looks like the winner at 600%. On profit, Line B returns 250% against 150%, which gives a value-based strategy a reason to move spend toward B that revenue values never supplied.
Timing matters as much as the number. The Target ROAS page in Google Ads Help recommends reporting values "for 4 weeks or 1-2 conversion cycles (whichever is longer)" before determining a target, and for Search campaigns where you have changed the way conversion value is reported, waiting 1-2 conversion cycles before adopting the strategy. It also warns that "setting a target that's too high may limit the amount of traffic your ads may get." In this example, a 500% target left in place over margin values asks for two and a half times the return the account has produced. Start from the converted 200%, hold it through a full conversion cycle, then move it toward the return you want while watching marginal return.
What changes in your reports
After the switch, the conversion value columns hold margin, and Conv. value/cost, the column Google tells you to multiply by 100 when choosing a target, becomes a profit ROAS. Revenue leaves those columns. Year-over-year comparisons break at the switch date, so annotate it and tell everyone who reads the dashboard. Keep revenue visible elsewhere: Google lists revenue and gross profit among the cart data metrics, and your own order data stays the reference. A profit value is also still an attributed value. Whether those orders would have happened without the ad is a separate question, one that incrementality testing answers.
Which route fits which account
Retailers with a product feed should use the first two routes together: margin as the bidding value, plus cart data so product-level profit reports exist, with returns handled through adjustments. Lead generation and service accounts have no feed, so margin has to arrive as the conversion value, typically an expected margin per lead type. Accounts whose margin varies mainly by customer or region can start with value rules, which need no tag work. A team that cannot yet calculate order margin can begin with cart data reporting to see where profit sits, then build the value afterward. Our paid media team can help with the build.
Sources
- Google Ads Help: About Maximize conversion value bidding
- Google Ads Help: About conversions with cart data
- Google Merchant Center Help: Cost of goods sold (
cost_of_goods_sold) attribute - Google Ads Help: Top tips to optimize for the holiday season and beyond with Google AI (August 27, 2024)
- Google Ads Help: About Smart Bidding
- Google Ads Help: About conversion value rules
- Google Ads Help: About conversion adjustments
- Google Ads Help: About Target ROAS bidding