She thought she was breaking even. Google lied.

Have you ever looked at your Google Ads dashboard and thought, "The numbers say I'm making money... so why does my bank account feel empty?"

That is exactly what happened to a new Google Ads coaching client of mine, an online business owner named Amy.

Amy makes beautiful, custom handmade pieces (for privacy, I'll keep her specific niche disguised). When she booked a call with me, she was confused. Her Google Ads reports showed a ROAS of 2.0, which was her breakeven point - earning $2 in revenue for every $1 in ad spend.

But she didn't feel like the ads were working. Someone had set up the campaigns for her a while ago, and she hadn't touched them since. She told me, "I shouldn't just be wasting money on this... I should probably know what's going on."

We dug into the account and found two massive problems hiding in plain sight...

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First, we solved the mystery of the "missing profit."

It turned out that Amy’s account was tracking every single sale twice. Once through Google Analytics, and once through the Google tag (via Shopify conversion tracking). Sadly, this issue is more common than you'd think.

That "2.0 ROAS" on her screen? It was a lie. Because the conversions were double-counted, her real ROAS was actually closer to 1.0. It wasn't Google's fault, though; it was the fault of the person who set up the account in the first place. 

With a real ROAS of 1.0, she was spending $1 to make $1. She wasn't breaking even; she was losing money on every single sale!

But that wasn't the only problem. Once we fixed the tracking, by setting one of those Purchase conversions as "Secondary," we had to fix the strategy.

Amy was using Manual CPC bidding in her Shopping campaigns. Effectively, she was telling Google, "Get me whatever clicks you can find for under $1."

And Google did! Her average CPC was just $0.68. But with Manual CPC bidding, Google didn't care if those clicks turned into profitable customers; it only cared about getting her cheap traffic.

This led to major traffic quality issues. For example:

• Product-level insights: One of her products had generated about 9 real sales. But because the conversion rate on those cheap clicks was so low, the cost to acquire those customers was higher than the profit she made on the item! She was paying for sales that lost her money.
• Search term analysis: Amy was advertising on broad searches like "coaster" or "leather coaster." (note: she doesn't sell coasters, I'm using these search terms as illustrative examples of "broadness") While relevant, these generic terms were bringing in a lot of non-converting "window shoppers," not buyers. Meanwhile, high-converting and profitable terms like "personalized gifts for groomsmen" weren't being prioritized by the campaign, since those CPCs were more expensive.

The solution: We needed to tell Google to stop hunting for bargain-bin clicks and start hunting for customers. And we did that by switching her Shopping campaign bid strategy from Manual CPC to Target ROAS.

Instead of saying, "Don't spend more than $1 per click," Amy is now telling Google Ads, "Feel free to spend a couple of bucks per click, as long as you expect it to bring me a 200% return."

Her Shopping campaign will now prioritize high-intent searchers over low-intent window shoppers, and naturally bid down on the unprofitable products while bidding up and investing more in the winners.

Are your Google Ads campaigns actually profitable, or is your dashboard lying to you? Here's how to find out, like Amy:

• Audit your conversions: If your revenue numbers look inflated compared to your backend sales, check if you are tracking the same action multiple times. To do this, add the Segment for Conversion action to your campaign view, to see what's actually being included in that "Conversions" column.

• Calculate your "Real" ROAS: Do you know your breakeven ROAS? In the last issue of The Insider, I referred you to Episode 88 of my Inside Google Ads podcast for an in-depth guide on how to calculate whether ads are right for you. I'm recommending this episode once again if you need a primer and/or refresher on this topic.

• Ditch Manual CPC: If you need profitability, then don't choose a bid strategy that's optimized for cheap clicks. Gather conversion data as quickly as you can, then switch to Target ROAS to align Google's goals with your bank account's goals.

Do your Google Ads results feel too good to be true? Book a call with me and we'll find out if your metrics are lying to you.