> For the complete documentation index, see [llms.txt](https://help.littledata.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.littledata.io/sources/profit-signal/how-to-use-profit-signal.md).

# How to use Profit Signal

Profit Signal sends the contribution margin of each order to your marketing destinations, so your ad platforms can optimize toward profit instead of revenue.

* For **Google Ads** and **Meta Conversions API**, it changes the conversion value from revenue to profit.
* For **Google Analytics 4** and **Segment**, it adds a `profit` parameter without changing the reported revenue value.

This guide explains how to enable Profit Signal, how profit values are calculated, and how to use those values to optimize your ads.

## How to enable Profit Signal

{% stepper %}
{% step %}

### Select Profit Signal source

Within the Littledata app, find the Profit Signal source and click **Enable**.

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{% step %}

### Configure global margin

After the basic setup, you will be prompted to set your global margin. This is applied to every product on your store and is used to calculate the profit.

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{% step %}

### Product specific margin

Configure margin based on **Product Type**, **Vendor**, or product **Tag**. A product specific margin overwrites the global margin and only the **first match** found on the product is applied.

<figure><img src="/files/9bU3hYbyXhA3NbAW51tR" alt=""><figcaption></figcaption></figure>
{% endstep %}

{% step %}

### Turn on for destinations

Toggle the destinations you want and enable the Profit Signal.

<figure><img src="/files/AKr1gv0B716Nwx8tWHmJ" alt=""><figcaption></figcaption></figure>
{% endstep %}
{% endstepper %}

## How profit values are calculated

Littledata uses the gross margin you set to calculate the value sent with each order. When Profit Signal is enabled, the **value** sent to Google Ads or Meta is the calculated profit of the order, not the gross revenue. For Google Analytics and Segment, Littledata sends that same calculated profit as an additional `profit` parameter. For Google Analytics you will need to emnable this as a custom metric.

The calculation is product-based: Littledata starts from the order's gross revenue, removes shipping, tax, and discounts, and then applies your product margin to what remains to arrive at the profit value.

You can change your margin settings at any time. Any orders processed after the change will use the updated configuration for profit-based values.

### Global margin vs per-product margin

You can set a global margin that applies across your catalog, and add category margins for more precise control. Per-product margins override the global margin: if more than one per-product margin could apply, Littledata uses the first matching rule it finds.

## Optimizing ads using gross profit

Once Profit Signal is feeding profit values to your ad platforms, you can let their bidding algorithms optimize toward gross profit rather than top-line revenue. This shifts spend toward orders that are genuinely profitable, instead of high-revenue orders that may carry thin margins.

### Destination comparison

| Destination name   | Adds `profit` parameter | Switches reporting value to profit |
| ------------------ | ----------------------- | ---------------------------------- |
| Google Ads         | ❌                       | ✅                                  |
| Meta Ads           | ❌                       | ✅                                  |
| Google Analytics 4 | ✅                       | ❌                                  |
| Segment            | ✅                       | ❌                                  |

### Meta Ads

For Meta Conversions API, Profit Signal switches the `revenue` field used in reporting to profit, so your purchase conversion value reflects gross profit. Meta keeps a separate `net revenue` field, and Profit Signal does not change that field.

To optimize on profit, use a value-based strategy such as **Highest value** or a **ROAS goal** for your purchase conversions. Because the conversion value Meta receives is now profit, the algorithm bids toward the orders that return the most profit rather than the most revenue.

For more on how Littledata sends data to Meta, see [How it works: Shopify to Meta Conversions API](/integrations/facebook-capi/how-it-works-shopify-to-meta-conversions-api.md).

### Google Ads

For Google Ads, Profit Signal switches the reported conversion value from revenue to profit. Pair this with a value-based Smart Bidding strategy such as **Maximize conversion value** or **Target ROAS** so the algorithm optimizes against profit.

With profit as the conversion value, your reported ROAS becomes a return on profit. Campaigns that drive high revenue but low margin will look less attractive, and budget naturally moves toward the products and audiences that generate the most profit.

For more on how Littledata sends data to Google Ads, see [How it works: Google Ads](/integrations/google-ads/google-ads-how-it-works.md).