Are Your Pay-Per-Click Ads Holding Their Weight?
Learn How To Easily Analyze The ROI on Your PPC
Google Analytics can show you your Return on Investment pretty easily. The ROAS column shows you Return on Ad Spend. If you earn more than you spend the numbers are in green.
The ad spend does not take into account the payment to an agency to manage the ads.
Also – revenue is not profit. If you want to figure out if the ads are worthwhile you also have to take into account the additional purchases from a new client in the future.
Some people use 5 years. And take into account any maintenance or up-sales you can get from this client.
Of course, this is on the condition that this is a new client. So don’t use this calculation for existing clients – people who searched on your brand terms.
You also may want to take into account the fact that some people will come through clicking on an ad but won’t buy on this 1st visit. Google Ads lets you change the conversion attribution from last click to first click to help overcome this problem. You can also increase or decrease the time window used for this calculation.
There are additional factors that complicated the issue that we will consider in subsequent blog posts.