Google Ads ROI Calculator
What is Google Ads ROI?
Google Ads ROI (Return on Investment) measures the profitability of your Google Ads campaigns compared to their cost. Calculating this metric can help you understand how effectively your ads are converting clicks into revenue and make data-driven budget decisions about your future campaigns.
Relevant channel: Google Ads
How to use this Google Ads ROI calculator
To calculate your Google Ads ROI, first select whether or not you have already completed your ad campaign.
If your answer is yes, enter your Google ad cost, your revenue from Google Ads, and any additional cost, such as agency fees, that you might have incurred.
If your answer is no, enter your target revenue from your campaign, your average revenue per conversion, your expected conversion rate, and your expected cost-per-click (CPC).
Based on your inputs, the tool will instantly calculate your current or expected Google Ads ROI, giving insights into your ad campaign.
Google Ads ROI formula
Google Ads ROI = ((Total Ad Revenue- Total Ad Cost) / Total Ad Cost) × 100
Here,
If your campaign is already completed,
Total Ad Cost = Google Ad Cost + Additional Cost
If you are planning a campaign for the future, your target revenue will be taken as your total ad revenue, and total ad cost will be calculated as follows:
Required conversions = Target Revenue / Average Revenue per Conversion
Required clicks = (Required conversions / Expected Conversion Rate)*100
Total Ad Cost = Required clicks × Expected CPC
Understanding the Google Ads ROI result
Your Google Ads ROI will depend on various factors such as your industry, competition, and overall ad performance.
A high ROI indicates that your campaign is profitable and that it will be, or has already been, effectively converting your target audience.
A low ROI suggests that you may need to optimize your campaigns or increase ad efficiency. If your ROI is negative, it signals that your campaign is a bad investment in its current form and that you need to identify areas for improvement.
When to calculate Google Ads ROI
You should calculate your Google Ads ROI in the following key scenarios:
After a campaign ends to measure overall success
Before launching a new campaign to predict profitability
When comparing the performance of different ad campaigns or keywords
To determine the right time to scale your budget based on positive ROI
How to calculate Google Ads ROI (with example)
Let us imagine that you have just completed your Google Ads campaign, and your total cost was $500, your total ad revenue was $1200, and you paid $10 to your ad agency. Your Google Ads ROI will be calculated as follows:
Google Ads ROI = ((Total Ad Revenue- Total Ad Cost) / Total Ad Cost) × 100
Let’s assume your monthly investment is $20,000, your CPC is $2, your conversion rate is 4%, your profit margin is 30%, sales per customer is 2, and your average ticket is $500. You can calculate your Google Ads ROI as follows:
Google Ads ROI = ((Total Ad Revenue- Total Ad Cost) / Total Ad Cost) × 100
Total Ad Cost = 500 +10 = $510
Google Ads ROI = ((1200-510)/510) x 100 = 140%
Here, your Google ads ROI was 140%, indicating that your campaign’s revenue was 1.4 times its cost.
Let us take another scenario where you are still planning your campaign. Say your target revenue is $2000, the average revenue per conversion is $10, the expected conversion rate is 20%, and the expected CPC is $0.1. Here,
Required conversions = 2000/10 = 200
Required clicks = (200 / 20 )*100 = 1000
Total Ad Cost = 1000 × 0.1 = $100
Google Ads ROI = ((2000 - 100)/100) x100 = 1900%
In this example, your Google Ads ROI is 1900%, indicating that your campaign is highly profitable, generating 19 times the return on your investment.
How to improve your Google Ads ROI
Use highly targeted keywords to drive relevant traffic and improve conversion rates
Optimize your landing pages for better user experience and higher conversions
Test different ad creatives to find the best-performing versions
Implement retargeting strategies to capture missed opportunities
Continuously monitor and adjust bids to lower CPC and increase ROI
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