UNIT ECONOMICS: THE OVERLOOKED REASON EVEN ‘PERFECTLY OPTIMIZED' GOOGLE ADS CAMPAIGNS FAIL

Summary from the TLDR Marketing newsletter

Google Ads campaigns can fail even when optimized because poor unit economics make profitable scaling impossible. Strong PPC tactics cannot overcome weak margins or low LTV. Unit economics set limits on CPCs, CPA targets, auction competitiveness, and growth. One ecommerce brand saw ROAS fall from 1,000% to 700% as CPCs rose, and the fix required raising AOV and improving LTV rather than changing campaigns. In another case, a supplements brand scaled spend to £26K per month and acquired 430 subscriptions at a £123 CPA because each customer had a £309 LTV, which made aggressive bidding profitable.