Analytics and ROI

​Return on investment (ROI)

When you use AdWords to increase conversions such as sales, leads, and downloads, it's a good idea to measure your return on investment (ROI). Knowing your ROI, you'll be sure that the money you're spending on AdWords advertising is going to a good cause: healthy profits for your business!

 

What's ROI?

ROI is the ratio of your profits to your costs, and the exact method you use to calculate it depends upon the goals of your campaign. For example, an investment of $1000, which leads to revenue of $1200, gives you a profit of $200. You can then calculate your ROI as (1200-1000)/1000), or 20%. It's typically the most important measurement for an advertiser because it's based on your specific advertising goals and shows the real effect your advertising efforts have on your business.

 

Why ROI matters

By calculating your ROI, you'll learn how much money you've made by advertising with AdWords. You can use ROI to help you decide how to spend your budget. For example, if you find that a certain campaign is generating a higher ROI than others, you can apply more of your budget to the successful campaign, and less to the ones that aren't performing as well. You can also use the information to try improve the performance of the less successful campaigns.