Question from Reddit:
eCommerce retailer selling a small range of eco-friendly cleaning products. We have built a brand on social media and are now entering the world of Google Ads.
A one-time purchase is £10-£15.
We also offer a subscription service based on 2, 3, 4, 6, 8 and 12 week delivery frequencies (the payment method automatically charged with each delivery). This is where we want to steer customers to generate recurring revenue and also introduce new products in the future to increase AOV.
Our primary goal with Google Ads is to generate sales, however, we’re concerned only tracking one-time or first purchases (at just £10-15 per purchase) is likely to make our ROAS look awful and a LOT less than what it actually would be if subsequent purchases and revenue were tracked.
We’re wondering whether our focus should be more on the cost of acquiring a new customer than simply looking at ad spend vs revenue. Then we can measure LTV offline away from Google Ads but still use our data to help optimise campaigns.
Is it even technically possible to track recurring purchase revenue in Google Ads when the second and all future payments are taken automatically outside of the website?
How best should we navigate our tracking strategy so we can maximise the value of Google Ads to our business?
Answer from Nabil:
The short answer is:
It is absolutely possible and highly recommended to track recurring subscription revenue in Google Ads, and you are right that only tracking the initial small purchase will make your Return on Ad Spend (ROAS) look awful and mislead your optimization.
The technical solution is to use the Google Ads API to send the subsequent, recurring payment events directly to Google Ads as new conversions, using the original Google Click ID (gclid) from the first purchase to correctly attribute that later revenue to the initial ad click.
Your tracking strategy should focus on separating the initial low-value purchase conversion from the high-value recurring_purchase conversion and feeding both, along with the correct lifetime value (LTV) data, back into Google Ads for smart bidding and optimization.
The long answer is:
Your concern about your ROAS looking terrible by only counting the initial £10-£15 purchase is completely valid and highlights a major challenge for subscription businesses using Google Ads.
Since the subsequent, higher-value recurring payments occur off-site, typically via a subscription billing platform that automatically charges the customer’s payment method, the standard GA4 or Google Ads conversion tag on your website never fires for these future events, meaning that valuable revenue is never attributed back to your campaigns.
You are absolutely correct to shift your focus to the Cost of Acquiring a Customer (CAC) and Lifetime Value (LTV).
While tracking LTV offline is necessary, the key to maximizing Google Ads value is to get that future LTV revenue back into the ad platform so its bidding algorithms can learn which campaigns, ad groups, and keywords generate the most valuable customers, not just the cheapest first purchase.
The most robust, scalable, and accurate solution for this is a server-side data pipeline that links your backend subscription revenue to the original Google Ads click, and this is where a combination of APIs and a server-side solution excels.
You should use Google Tag Manager to ensure that when the customer makes the first purchase, the Google Click ID (gclid) is captured from the landing page URL and stored securely on your server, associated with that customer’s unique ID.
Then, you use a server-side environment like Stape or Google Cloud Platform, which acts as the bridge.
When your subscription billing system processes a recurring payment, this system should trigger an event that sends the customer ID and the amount of the recurring payment to your server environment.
The server then uses the stored customer ID to retrieve the original gclid and uses the Google Ads API to send a new conversion event – call it recurring_purchase – directly to Google Ads.
You include the original gclid as the gclid parameter and the payment amount as the value, ensuring that this second, third, and every subsequent payment is attributed to the initial ad that acquired the customer.
Additionally, you should be using the Google Analytics Data API to pull clean first-purchase data into a centralized data warehouse and, when combined with your recurring revenue data, you can calculate the true LTV.
This blended data can then be visualized using the Looker Studio API to create a custom ROAS dashboard that shows your True ROAS based on LTV, allowing you to make informed decisions that align with your business goal of generating recurring revenue, not just a low first-time sale.
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