Contribution margin as conversion value: the switch in five steps

Most stores pass order value as the conversion value. Google then optimises for exactly that, including orders that lose money once cost of goods, shipping, payment fees and returns are accounted for.

Step 1: make margin available per product

You do not need a perfect number. A margin per product group from your ERP beats an exact revenue value that measures the wrong thing.

Step 2: factor in return rates

Bake the average return rate per product group directly into the value you pass. In fashion this can be the difference between profitable and loss-making.

Step 3: send it server-side

The value belongs in a server-side transmission, not in the browser. Otherwise it is readable by anyone and lost to ad blockers and consent rejections.

Step 4: recalculate your targets

A ROAS target of 4 on revenue corresponds to roughly 1.0 to 1.4 on contribution margin, depending on your margins. Do the maths before switching or you will throttle the account.

Step 5: sit through the learning phase

Expect two to three weeks of turbulence. Reverting after five days does not mean the test failed. It means you paid for it without running it.