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How to measure your ROI from a Google AdWords campaign

So you have paid for a Google AdWords campaign and now you want to measure its success and decide where to keep investing. One way to do this is to look at your ROI (return on investment).

Measuring ROI for Google AdWords

How your Google AdWords campaign might look

 

ROI is a good metric to use as it measures profits made in relation to capital invested and therefore the efficiency of your investment. You can then compare the ROI of this campaign with that of other online or offline campaigns and decide where your money will work harder in future.

To help measure your AdWords ROI you will need to track conversions (actions that you want your customers to take after clicking on your ad, such as a purchase). Free tools are available to help you do this – try Conversion Tracking or Google Analytics.

Put simply ROI is how much profit you have made from your ad compared to how much you have spent on your ad. Take the revenue that resulted from your ads, subtract the advertising costs, then divide by your advertising costs and multiply by 100 to get your ROI percentage.

 For example, let’s compare the following AdWord campaigns

 

Campaign X

Campaign Y

Total Spend

£1,000

£250

Click throughs

5000

1000

Conversions

50

25

Conversion rate

0.01

0.025

Revenue

£1,500

£750

ROI

50%

200%

 

 

 

As you can see, although Campaign X generated more click throughs, conversions and revenue, Campaign Y was actually more efficient with an ROI of 200%. While both campaigns were profitable it would be worth investing more in Campaign Y next time.  For more information on conversion tracking or measurement tools from the experts at Varn get in touch by calling 01225 863047 or clicking here.