How to measure ROI performance in advertising for Google Ads campaigns?
How to measure ROI performance in advertising for Google Ads campaigns?
By rajesh sahotra
August 10, 2020 3 min read Marketing

Are you spending money on paid marketing channels like Google, Facebook and other platforms? Do you know how to generate ROI? In this blog, we will share with you to measure ROI on your paid advertising campaigns.

Calculating the ROI also allows you to know how much money you have earned with the investment made in online Adwords advertising and can also help you decide how to invest the budget that you have decided to use in advertising.

All Digital campaigns have the following common objectives.

  • To reach the right audience
  • To engage the audience with relevant content
  • To motivate the audience to take a desired action i.e registration, demo, conversion and etc.
  • To be efficient with the spend
  • To deliver a positive ROI and ROAS

How to calculate ROI

Syntax of ROI :-

(Gross Profit) (Investment on marketing)
—————————————————–    * 100
Investment on marketing

Example 1- If you spend $50 on ads, and return to make $200. That gives you a gain of $150, which means 300% ROI.

Amount invested = $50
Amount Returned = $200
Investment Gain = $150
Return on investment (ROI) = 300%

Example 2– If you spend $30 on ads, and return to make $150. That gives you a gain of $120, which means 400% ROI.

$150 – $30
————–   * 100  = 400%

Before calculating ROI, You have to also calculate ROAS ( Return on ad spend)

Syntax of ROAS

                              Revenue from ads
ROAS =               ————————
                                   Cost of ads

Configure conversion tracking to improve ROI of Google ad campaign

Conversion tracking helps you to measure the success of your campaign, and gives you information to measure your ROI and helps to optimize your adword account.

There are four types of conversion you can track.

  • Website,
  • APP tracking,
  • Calls track,
  • Import conversion from another system


Configure conversion tracking
Configure conversion tracking

What can be tracked as a conversion – A conversion can be any sort of data for your business that you can define.

How to Configure conversion tracking in google Ads

  • Go to google ads account
  • Select tool and setting
  • Click on conversion under measurement.

This is where we can configure our dedicated google ads conversion hacking and this is also where we can import our google analytic goals and transitions.

Here is an example to Setup call tracking and website phone tracking as conversion.

  • Click the plus button under conversion
  • Choose Phone calls option
  • Select Calls from ads using call extensions or call-only ads, then click Continue.
  • Select the source of the phone calls you’d like to track
    • Calls from ads using call extensions or call-only ads
    • Calls to a phone number on your website
    • Clicks on your number on your mobile website
  • Fill the required information according to your goal. You don’t need to change the category option. In the Value option don’t fill the value as this is a phone number, always click on “Don’t use a value for this conversion action (not recommended).”
  • Connect conversion tracking through google tag manager. You’ll need to provide the following information – Conversion ID and Conversion label
  • Make sure you add a  Conversion Linker tag and configure it to fire on all of your web pages.
What should be tracked as a conversion
What should be tracked as a conversion

How to optimize Google Ads Campaign for Better ROI

  • Always use “people in my target location”. 
    • Go to the campaign setting and select target location.
  • It’s recommended to create 3 ads in a group or more than 3 for better performance.
  • Optimize your landing page, here are some points to need to consider.
    • Landing page design
    • Use call to action buttons
    • Page speed
    • Mobile friendly ( cross check on all devices)
    • Optimized landing page content 
  • Use proper ad extensions  – call, location, sitelinks and seller ratings
  • User engaging ad text with call to actions terms
  • Use a negative keywords list.

Click to read how optimize Google Adwords campaigns effectively.

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