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Measuring ROI with Google Ads

on November 29, 2023

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One of the most effective ways to measure marketing success is by calculating the return on investment (ROI). Google Ads is a popular platform for online advertising, and measuring ROI with Google Ads is a great way to determine the effectiveness of your marketing campaigns. In this blog, we will discuss how to measure ROI with Google Ads and the metrics that matter most.

How to Measure ROI with Google Ads

Measuring ROI with Google Ads is relatively easy, thanks to the platform’s built-in measurement tools. Here are the steps to measure ROI with Google Ads:

Set up conversion tracking

  1. Conversion tracking is a crucial tool for measuring the effectiveness of your Google Ads campaigns. By tracking the actions that users take on your website after clicking on your ad, you can determine which ads are generating conversions and measure their impact on your business. Here are some tips for setting up conversion tracking:
    • Define your conversion: Before you can set up conversion tracking, you need to define what a conversion means for your business. A conversion could be a purchase, a sign-up, a form submission, or any other action that is valuable to your business.
    • Set up a conversion action in Google Ads: Once you have defined your conversion, you can set up a conversion action in Google Ads. A conversion action is a specific customer activity that is valuable to your business. You can use conversion tracking to track the following kinds of actions:
      • Website actions: Purchases, sign-ups, and other actions that occur on your website.
      • Phone calls: Calls to a phone number on your website.
      • App installs: Installs of your mobile app from an ad.
      • App actions: In-app actions that occur after an ad click.
      • Import actions: Actions that occur offline, such as in-store purchases.
    • Install the Google Ads conversion tracking code: Once you have set up a conversion action in Google Ads, you need to install the Google Ads conversion tracking code on your website. This code will track the actions that users take on your website after clicking on your ad.
    • Test your conversion tracking: After you have installed the Google Ads conversion tracking code, you should test your conversion tracking to make sure it is working correctly. You can do this by clicking on one of your ads and completing a conversion action on your website.

    By following these steps, you can set up conversion tracking for your Google Ads campaigns and measure their impact on your business. Here are some benefits of using conversion tracking:

    1. Measure the effectiveness of your ads: By tracking conversions, you can measure the effectiveness of your ads and determine which campaigns are generating the most revenue.
    2. Optimize your campaigns: By tracking conversions, you can optimize your campaigns to target the most profitable leads and customers.
    3. Improve customer relationships: By tracking conversions, you can identify which leads and customers are coming from your Google Ads campaigns and tailor your marketing efforts to their needs.
    4. Increase revenue: By measuring the ROI of your Google Ads campaigns, you can identify which campaigns are generating the most revenue and allocate your budget accordingly.
  2. Calculate your conversion value:Calculating your conversion value is an essential step in measuring the ROI of your Google Ads campaigns. Conversion value is the revenue generated by each conversion, and it is calculated by multiplying the average order value by the conversion rate. Here are some tips for calculating your conversion value:
    1. Define your average order value: Average order value is the average amount of revenue generated by each order. To calculate your average order value, divide your total revenue by the number of orders.
    2. Determine your conversion rate: Conversion rate is the percentage of users who complete a desired action on your website after clicking on your ad. To determine your conversion rate, divide the number of conversions by the number of clicks.
    3. Multiply your average order value by your conversion rate: Once you have determined your average order value and conversion rate, you can calculate your conversion value by multiplying your average order value by your conversion rate.

    By calculating your conversion value, you can gain valuable insights into the effectiveness of your Google Ads campaigns and make data-driven decisions to optimize your campaigns. Here are some benefits of calculating your conversion value:

    1. Measure the effectiveness of your ads: By calculating your conversion value, you can measure the effectiveness of your ads and determine which campaigns are generating the most revenue.
    2. Optimize your campaigns: By calculating your conversion value, you can optimize your campaigns to target the most profitable leads and customers.
    3. Improve customer relationships: By calculating your conversion value, you can identify which leads and customers are coming from your Google Ads campaigns and tailor your marketing efforts to their needs.
    4. Increase revenue: By measuring the ROI of your Google Ads campaigns, you can identify which campaigns are generating the most revenue and allocate your budget accordingly.
  3. Calculate your cost per conversion: Cost per conversion is the amount you spend on each conversion. It is calculated by dividing the total cost of your ads by the number of conversions.
  4. Calculate your ROI: ROI is calculated by dividing the conversion value by the cost of your ads. The result is expressed as a percentage.

Metrics that Matter Most

While ROI is the most important metric for measuring the success of your Google Ads campaigns, there are other metrics that matter as well. Here are some of the most important metrics to track:

  1. Click-through rate (CTR): CTR is the percentage of users who click on your ad after seeing it. A high CTR indicates that your ad is relevant and engaging to your target audience.
  2. Cost per click (CPC): CPC is the amount you pay for each click on your ad. A low CPC indicates that you are getting good value for your money.
  3. Conversion rate: Conversion rate is the percentage of users who complete a desired action on your website after clicking on your ad. A high conversion rate indicates that your ad is effective at driving conversions.
  4. Cost per conversion (CPC): CPC is the amount you spend on each conversion. A low CPC indicates that you are getting good value for your money.
  5. Return on ad spend (ROAS): ROAS is a metric that measures the revenue generated by your ads compared to the cost of your ads. It is calculated by dividing the conversion value by the cost of your ads.

Using A CRM

Using a CRM to track the ROI of Google Ads is an effective way to measure the success of your marketing campaigns. A CRM, or customer relationship management system, is a tool that helps businesses manage their interactions with customers and prospects. By integrating your CRM with Google Ads, you can track the performance of your ads and measure their impact on your business. In this section, we will discuss how to use a CRM to track the ROI of Google Ads and the benefits of doing so.

How to Use a CRM to Track the ROI of Google Ads

  1. Integrate your CRM with Google Ads: The first step to using a CRM to track the ROI of Google Ads is to integrate your CRM with Google Ads. This will allow you to track the performance of your ads and measure their impact on your business. To integrate your CRM with Google Ads, follow these steps:
    • Sign in to your Google Ads account.
    • Click on the “Tools & Settings” icon in the top right corner of the page.
    • Under the “Setup” section, click on “Linked accounts.”
    • Click on “CRM” and follow the prompts to link your CRM to Google Ads.
  2. Set up conversion tracking: Conversion tracking is a tool that allows you to track the actions that users take on your website after clicking on your ad. It helps you measure the effectiveness of your ads by showing you which ads are generating conversions. To set up conversion tracking, follow these steps:
    • Sign in to your Google Ads account.
    • Click on the “Tools & Settings” icon in the top right corner of the page.
    • Under the “Measurement” section, click on “Conversions.”
    • Click on the blue plus button to create a new conversion action.
    • Follow the prompts to set up your conversion tracking.
  3. Track conversions in your CRM: Once you have set up conversion tracking, you can track conversions in your CRM. This will allow you to see which leads and customers are coming from your Google Ads campaigns and measure the ROI of your ads. To track conversions in your CRM, follow these steps:
    • Set up a custom field in your CRM to track the source of your leads and customers.
    • Use the Google Ads conversion tracking code to track conversions on your website.
    • When a lead or customer converts on your website, the conversion data will be sent to your CRM and recorded in the custom field.
  4. Calculate your ROI: Once you have tracked conversions in your CRM, you can calculate your ROI. To calculate your ROI, follow these steps:
    • Determine your total revenue generated from your Google Ads campaigns.
    • Determine your total cost of your Google Ads campaigns.
    • Divide your total revenue by your total cost to get your ROI.

Benefits of Using a CRM to Track the ROI of Google Ads

  1. Measure the effectiveness of your ads: By using a CRM to track the ROI of Google Ads, you can measure the effectiveness of your ads and determine which campaigns are generating the most revenue.
  2. Optimize your campaigns: By tracking conversions in your CRM, you can optimize your campaigns to target the most profitable leads and customers.
  3. Improve customer relationships: By tracking conversions in your CRM, you can identify which leads and customers are coming from your Google Ads campaigns and tailor your marketing efforts to their needs.
  4. Increase revenue: By measuring the ROI of your Google Ads campaigns, you can identify which campaigns are generating the most revenue and allocate your budget accordingly.

Using a CRM to track the ROI of Google Ads is an effective way to measure the success of your marketing campaigns. By integrating your CRM with Google Ads, setting up conversion tracking, tracking conversions in your CRM, and calculating your ROI, you can gain valuable insights into the effectiveness of your ads and make data-driven decisions to optimize your campaigns. Remember that ROI is the most important metric, and it should be the primary focus of your measurement efforts. By using a CRM to track the ROI of Google Ads, you can ensure that your marketing investment is generating revenue and driving business growth.

Measuring ROI with Google Ads is an effective way to determine the success of your marketing campaigns. By tracking metrics such as CTR, CPC, conversion rate, and ROAS, you can gain valuable insights into the effectiveness of your ads and make data-driven decisions to optimize your campaigns. Remember that ROI is the most important metric, and it should be the primary focus of your measurement efforts. By measuring ROI with Google Ads, you can ensure that your marketing investment is generating revenue and driving business growth.

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