TheCommercialViabilityAudit:WhyWeTurnAway40%ofLeads

Most agencies assume demand exists. They take your brief, run the campaigns, and bill monthly. Whether those campaigns can actually generate profit at your margin structure is your problem, not theirs.

We do something different. Before we onboard a client, we run what we call a Commercial Viability Audit. It is not a PPC audit; it is a reality check on whether paid acquisition makes commercial sense for your business right now.

The result: we turn away about 40% of qualified leads. Not because their businesses are bad. Because the timing is wrong, the economics do not work, or the runway is too short to learn.

Why Most Brands Are Not Ready for Google Ads

Google Ads is not a growth lever. It is an amplifier. If your unit economics are healthy, it amplifies profit. If they are broken, it amplifies losses.

The problem is that most brands treat Google Ads as a fix for underlying business problems. Revenue is flat, so they increase spend. Margins are thin, so they chase volume. The result is usually the same: more revenue, less profit, shorter runway.

The Runway Test

Google Ads requires learning time. Smart Bidding needs data. Feed optimisation takes iterations. Even with excellent execution, the first 60 to 90 days are about finding what works.

If your budget only covers 30 days of testing, you will run out of money before you have enough data to make informed decisions. This is not pessimism. It is maths.

How to Know If Your Unit Economics Are Broken

Before you spend £1 on Google Ads, calculate your breakeven ROAS. This is the return on ad spend required just to cover your costs, before making any profit.

If your contribution margin is 50%, your breakeven ROAS is 2.0. If your margin is 30%, your breakeven is 3.3. If your margin is 20%, your breakeven is 5.0.

Now compare that to realistic Google Ads performance in your category. If the achievable ROAS is lower than your breakeven, the maths does not work. Scaling will only scale the losses.

What We Look for in the Viability Audit

• Contribution margin by SKU: Not blended averages. Actual margins on the products you will advertise.
• Return rate by category: A 4.0 ROAS means nothing if 30% of orders come back. (More on this in ourreturns analysis.)
• Payment terms and cash flow: If you pay suppliers in 30 days but customers pay you in 60, Google Ads can break your working capital.
• Existing channel performance: If organic and email are struggling, paid will not save you. It will expose the same problems faster.
• Competitive landscape: CPCs in your category determine what is economically possible.

Why Turning Away Business Is Good Business

Agencies that take every client end up with churn problems. Clients that should not have been on paid advertising leave disappointed, blame the agency, and tell everyone.

We would rather have 60 clients who are genuinely suited to paid acquisition than 100 clients where 40 are fighting against their own economics.

When we say no, we explain why. Sometimes it is fixable: raise prices, improve margins, build more runway. Sometimes it is timing: come back in six months when the fundamentals are stronger.

Before You Spend £1

If you are considering scaling Google Ads, start with these questions:

1. 1. What is my real contribution margin?Not gross margin. Contribution margin after COGS, shipping, payment processing, and returns.
2. 2. What ROAS do I need to break even?Use the formula above. Be honest about the number.
3. 3. Is that ROAS achievable in my category?Look at industry benchmarks. Talk to other operators. If no one is achieving your breakeven, there is a reason.
4. 4. Do I have 90 days of runway? Not 30 days of hope. 90 days of committed test budget.

If the answers are uncomfortable, that discomfort is valuable. Better to know now than after £50k of unprofitable spend.