How to Calculate the Roi of Your Adwords Campaigns
Posted: Wed Jan 25, 2023 3:08 am
Knowing how to calculate the roi of adwords campaigns is essential for anyone who wants to increase their company's revenue through sponsored links. We've talked before about the importance of knowing how to calculate the roi of your online campaigns , but today we're going to focus especially on calculating this metric in google adwords, one of the most important tools for digital marketing. Still not mastered the subject? Let's answer your questions in today's post! What is roi and what is its marketing value? The acronym roi comes from the english term return on investment, which in portuguese means return on investment. In practice, roi is a way of measuring what percentage of financial return a given investment in marketing has generated.
This metric is important because it provides a value for the efficiency of marketing actions, allowing you to optimize them. Also, with roi, you can equate different marketing campaigns with different values and make a comparison between them. With this resource in hand, a company's marketing actions can go through a continuous optimization process, generating increasingly better results for Latvia Phone Number List the company. How to calculate the roi of adwords campaigns? In order to calculate the roi of adwords campaigns, you will need to know the formula for calculating this metric, which is as follows: roi = (revenue – expenses) / expenses in this formula, we understand revenue as the total revenue from the adwords campaign. Spending is the sum of the production costs of each item sold with the amount invested in the action itself.
Practical application let's see a simple example that helps to show in practice how to calculate the roi of adwords campaigns: company a ran a one-week campaign on google adwords, investing r$150 for it. At the end of the action, company a recorded 12 sales of its advertised product, whose price is r$50 and production cost is r$12. What was the roi of this action? Let's find out! Action revenue = 12 (sales) * brl 50 (product price) = brl 600; spend = 12 (sales) * $12 (production cost) + $150 (adwords investment) = $294. Now that we know the expenses and revenue, let's find the roi: roi = (brl 600 – brl 294) / brl 294; roi or 104%. The roi of this action was 104%, which means that for every brl 1 invested by company a, it received brl in profit.
This metric is important because it provides a value for the efficiency of marketing actions, allowing you to optimize them. Also, with roi, you can equate different marketing campaigns with different values and make a comparison between them. With this resource in hand, a company's marketing actions can go through a continuous optimization process, generating increasingly better results for Latvia Phone Number List the company. How to calculate the roi of adwords campaigns? In order to calculate the roi of adwords campaigns, you will need to know the formula for calculating this metric, which is as follows: roi = (revenue – expenses) / expenses in this formula, we understand revenue as the total revenue from the adwords campaign. Spending is the sum of the production costs of each item sold with the amount invested in the action itself.
Practical application let's see a simple example that helps to show in practice how to calculate the roi of adwords campaigns: company a ran a one-week campaign on google adwords, investing r$150 for it. At the end of the action, company a recorded 12 sales of its advertised product, whose price is r$50 and production cost is r$12. What was the roi of this action? Let's find out! Action revenue = 12 (sales) * brl 50 (product price) = brl 600; spend = 12 (sales) * $12 (production cost) + $150 (adwords investment) = $294. Now that we know the expenses and revenue, let's find the roi: roi = (brl 600 – brl 294) / brl 294; roi or 104%. The roi of this action was 104%, which means that for every brl 1 invested by company a, it received brl in profit.