Most Google Ads accounts waste spend, and anyone will agree with that, but the challenge lies in finding it. Sometimes, when looking at a broader account level, performance may look healthy, with ROAS on target, revenue growing, and spend appearing under control.
But when you look further down, at a product level, at each individual SKU, the picture is often very different. Some SKUs are reliable and driving growth, some are breaking even, and some are quietly absorbing budget without delivering enough value. By carrying out a SKU profitability audit, you can find the products that are dragging down the performance of your other products.
Why account-level reporting is not enough
Blended reporting hides product-level differences, and a strong group of bestsellers can make the whole account look efficient, even while other products are wasting your ad budget.
When looking at the SKU level of your paid ads account, you may find that:
- 20% of products drive most revenue
- A large group of SKUs receives clicks but few conversions (this is where a lot of budget gets lost)
- Low-margin products look strong on ROAS but weak on profit
- High-margin products are not getting enough visibility (this is where you should concentrate your budget)
If you only look at account-level ROAS, these patterns stay hidden.
What to include in a good SKU profitability audit
A good audit should review more than the revenue of each product. It should also look at:
- Cost
- ROAS
- Conversion rate
- Average CPC
- Clicks
- Impressions
- Margin
- Stock availability
- Price competitiveness
- Feed quality
- Product status
- Search term relevance
The goal is to understand whether each product is earning its place in the budget, and where budget can be better invested.
Segment products by their role in the sales funnel
Not every product should be judged in the same way, and the metrics above can mean different things depending on your brand and your products. This is where it's important to understand those nuances. Some products are designed to drive volume, others are strategic to help you compete with competitors, and some are seasonal or margin-led.
We would recommend dividing your SKUs into four categories:
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Scale - these are products with strong revenue, strong efficiency, and good commercial value. They may deserve more budget, better visibility, or stronger bidding.
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Fix - these products show potential but have minor issues that need tweaking, such as weak titles, missing attributes, poor imagery, stock gaps, or poor landing pages.
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Limit - these products spend money but do not generate enough value. They may need lower bids, tighter controls, or reduced visibility.
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Remove - these products have no clear paid media case. They may receive clicks without conversions, have poor margins, or be unavailable in key variants. They might be better suited to another channel.
Look for budget concentration
One of the most useful questions is: where does the majority of the ad budget currently go?
You may find that a third of your spend is going to products that are not hitting targets. This does not always mean those products should be paused, but it does mean they need a decision on whether they should be fixed, limited, restructured, or removed from paid activity.
A SKU-level audit can help with those decisions.
