Divide the return you’re generating from your Google Ads campaign by the amount of money you’ve put into the platform, multiply this figure by 100, and you’ll be left with your return on investment (ROI).
This important ratio is the key to understanding whether your paid search efforts are paying off.
If they’re not – ie, you’re working in minus numbers – you could be making one of these 6 common Google Ads mistakes, or it could be time to sign up for your free account audit and get some actionable advice from the Multi Layer Media team.
If they are, congratulations! You’re getting enough leads, sales, downloads or signups to make your investment in paid search worthwhile.
We’d still suggest getting that audit, though, as there could be issues that are limiting your campaigns’ potential.
We’d also recommend setting systems in place that will help you track your ROI from Google Ads as accurately and efficiently as possible, without having to deep-dive into multiple reports to get the information you need.
Three of the best ways to monitor your Google Ads ROI
Follow these three simple yet effective steps, and you’ll be uncovering the true value of your Google Ads campaigns in no time.
1. Make sure all conversions are being tracked from day dot
You can’t improve what you don’t understand. That’s why conversion tracking is often one of the first things we put in place when we set up or take over a client’s Google Ads account. Knowing exactly where every lead has come from helps us (and them) discover which of their keywords and ad groups are performing well, and which of them may need tweaking for better results.
Ideally, every action that can be completed on your landing page – and that is valuable to your business – needs to be tagged with a tracking script that feeds conversion data back into Google Ads. These actions can include purchases and sign-ups on your website itself; interactions on your app; and calls that have either been made directly from your ads, from a phone number on your website, or from your mobile platform.
We can also learn a lot from historical conversion tracking data. The Conversions report in the Campaigns tab will tell you:
- How many times you have received one or more conversions from a single click
- How much you spent on clicks, divided by your total conversions – your ROI!
- The percentage of clicks that resulted in conversions
- The number of times a customer viewed, but did not click on, your ad before completing an action
The last set of data can help you work out why the customer took so long to convert. Their decision could have been down to a lengthy research process or a lack of readiness to buy – or they could have put off their purchase because they lacked confidence in your brand and/or your landing page copy. If this is the case, use these insights to improve your approach.
2. Import all your offline conversion data into Google Ads
To truly appreciate how your PPC strategy is impacting your business growth, mix your online conversions with your offline conversions and see how the activity from each of these communication channels is resulting in sales.
Importing your offline conversions from both clicks and calls into Google Ads enables you to understand your ROI not just in terms of lead volume, but revenue too – and you can optimise your Google Ads account to reflect the trends and behaviours of your purchasers.
If the data tells you that 10% of your leads are producing 90% of your revenue, you need to look at the keywords and ad groups that are generating these actions, then spend some time optimising them for even more market capture. You could do this by adjusting your bids manually; increasing your ad spend; split testing your ad copy to see which version attracts the most attention; or even running a remarketing campaign to remind users to revisit your website when they’re ready to buy (or re-buy).
Blending your online and offline data sets will also help you identify which geographical locations are providing the best ROI, and which times of day are proving to be the most lucrative in terms of driving sales. You can adjust your campaign based on this combined data.
3. Define the long term value of your Google Ads leads
Think beyond the first sale. Calculate what that individual might be worth over the course of their relationship with your brand. This will give you the true ROI from each customer.
For example, if a typical person spends £250 during their first interaction but will return an average of two to three times to re-purchase, their lifetime value would be £750. Looking at the stats in this way paints a truer picture of the business that’s being generated – and can help to justify slightly higher cost-per-lead (CPL) targets.
You could spend hours collecting all this interesting data into a spreadsheet – but the best way to track the longer term value of Google Ads leads is to use a customer relationship management (CRM) system. This software can record how many interactions you have with the same person, and over time, will be able to provide you with more information on what their clicks and calls have been, and may well be, worth to your bottom line.
A good CRM will also offer features that help you nurture existing leads, identify upselling opportunities and better manage your existing customer base to encourage repeat sales.
Struggling to get your head around the concept of ROI? Need some help adjusting your Google Ads campaigns for a better return? Contact Multi Layer Media today on 01245 934167 to speak to our in-house PPC experts.