Measuring conversions and ROI from Google Ads
It’s really important to us that every pound of our clients’ Google Ads budget is spent well and provides a measurable return on investment. But how do we measure it?
What is the campaign’s objective?
Firstly, we define the campaign’s objective – the method of measurement will differ accordingly.
Google Ads campaigns typically have one of the following objectives:
- Generate new enquiries
- Make online sales (ecommerce)
- Brand awareness
To evaluate the campaign’s ROI we therefore need to work out:
- cost-per-enquiry, for enquiry-focused campaigns
- cost-per-sale, for ecommerce campaigns
- cost-per-visitor, for brand awareness campaigns
Measuring new enquiries
A new enquiry would typically be a customer completing a web form, making a phone call, sending an email or visiting a showroom in person. But how can we know whether the enquiry resulted from a Google Ad click?
With web forms, it’s relatively easy. We add tracking code to the website which logs the visitor’s source (Google Ads, organic search, Facebook etc), which is shown on the completed web form. If it was Google Ads we chalk up a conversion.
With phone calls it’s less straightforward. If the visitor was on mobile, and tapped the phone number on the website to make the call, that can be tracked in the same way web forms are. However, many visitors might key the number into their phone directly (or copy and paste it), so that call cannot be tracked.
Similarly with email links, if the visitor clicked the email address on the website we can track it, but if they type it (or copy and paste) into their email program we can’t.
When someone responds to a Google Ad by arriving at your shop or showroom it’s virtually impossible to know. You could ask the customer, but without a lengthy interrogation about exactly which link they clicked on (which is not great sales patter!), you’re unlikely to get reliable data.
Therefore, our conversion reporting for new enquiries would be a combination of the 100% accurate (web forms) and the under-reported (phone, email and on-premises).
Very often, a client will simply notice they are getting more enquiries (or footfall) when a Google Ads campaign is running. This anecdotal evidence complements our reporting.
To measure ROI, the cost of the campaign is divided by the number of enquiries it generated to give the cost-per-enquiry.
Measuring online sales (ecommerce)
Ecommerce sites have many challenges: the competition, fine margins, Amazon selling everything cheaper, cart abandonment, shipping and returns process, providing customer care. It’s therefore essential that any Google Ads campaign is expertly managed and ROI clearly demonstrated.
Fortunately, with the vast majority of ecommerce systems, it’s relatively easy to link each sale with the visitor’s source, so we can confidently report on the revenue generated by Google Ads clicks. Tracking code on the website registers each visitor’s source (Google Ads, organic search, Facebook etc). When a sale is confirmed (payment successful) the sale is linked back to source.
Simple maths then measures cost-per-sale, for example: if £1,000 spent on Google Ads generated 100 sales the cost-per-sale is £10.
The value of each sale is important too, so we would also look at revenue generated: if £1,000 spent on Google Ads generated revenue of £10,000, is that profitable?
A deeper dive in to the data might reveal that certain products are not converting well, in which case their ads can be further optimised or even withdrawn completely if the numbers are not adding up. Conversely, if certain products are generating more sales then extra ad budget could be allocated to boosting sales further.
Measuring brand awareness
At the simplest level this could be measured by number of visitors – cost-per-visitor calculation. We might also report on the average time spent on the website, the duration of the visit, the visitors’ gender, age and location.
The value of brand awareness is notoriously complex to calculate – we’ll leave that for a future article!
Measure monthly, not daily or per click
Most ad clicks do not convert, conversion rates are generally around 5%.
Therefore, trying to measure ROI of a single day’s activity or even a single click is not useful as the sample size is just too small; it’s more realistic to look back on a monthly basis and compare ad spend with conversions.
Challenges
Cookies
Some types of conversion tracking rely on cookies to work. We are increasingly moving towards a cookie-free world and tracking methods that rely on them are becoming less reliable.
Google Analytics 4, the latest version of Google’s reporting tool aims to provide more accurate conversion figures even where cookies are not present.
Cross-device browsing
This also causes tracking issues.
For example, if a user makes their initial visit by clicking a Google Ad on say a mobile, then comes back later on a desktop computer, the connection between the initial click and any conversion tracking is broken.
User thinking time
Some purchases, particularly big items, often have a considerable delay between initial website visit and the customer making the enquiry or purchase. Conversion tracking does recognise people who come back later (provided they use the same device) but only up to a point (often 30 or 60 days). People who come back much later (and not via an ad this time) are not registered as a Google Ads conversion.
Expert Google Ads management
As certified Google Ads managers, with years of experience, we bring an expert perspective to your advertising campaigns. We manage your ads with complete transparency, so you always know what we’re doing and what return on investment you’re achieving.
Read more about our Google Ads management service and read our Google Ads case study. Then contact us to discover how Google Ads could increase your enquiries.
