<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1243952632296836&amp;ev=PageView&amp;noscript=1">

How To Quantify ROI From Google Adwords

Posted by Mike Maccarino on Mon, Mar 05, 2018 @ 10:03 AM

In Google adwords

Driving traffic to your website can be seen as one of the most important ways to increase your return on investment from digital marketing. There are plenty of strategies to try and drive up traffic. One of the most popular and if done properly the most cost-effective is running a Google AdWords campaign. Just like any other savvy business owner you are probably thinking to yourself, “That’s great, but what is my ROI?” That’s a solid question, there are many different ways to quantify it. However, let’s take a look at how you can calculate yours and how to increase it.

When trying to calculate your return on investment from Adwords the most important thing is to track your conversion rate. A conversion can be different for everybody, boiling down what that means- it is the action that you want your customer to take. For an auto repair shop owner, a conversation would be having the potential customer scheduling an appointment online, make a phone call, or download a coupon. Now, to track this you would want to set sights on the ‘Thank You’ page when the form is completed or through call tracking.

Great job you got yourself a conversion! With this, you can now start to calculate your ROI. Bare with me we have to do a little bit of math. Here is what the equation looks like:

(Total Sales - (Total Product Cost + AdWords Cost)) / (Total Product Cost + AdWords Cost) = ROI

Let’s build a scenario to better understand the equation above. You have a service that costs your shop $100 that you then sell for $200. During your AdWords campaign, you were able to sell 6 services. Giving you a total sales of $1,200 and total AdWords costs of $200. Here is what your ROI would look like:

(1,200 - ($600 + 200)) / ($600 + 200) = 50%

Hands down the best way to increase your return is by hiring an agency who’s sole focus is increasing the traffic to your website via inbound market and digital marketing efforts. This is because we are constantly optimizing your digital campaigns making them more strategic and cost-effective.

 Learn More About Our Advanced Google Adwords Campaigns