How much profit you've made from your ads and free product listings compared to how much you've spent on them.
To calculate ROI, take the revenue that resulted from your ads and listings, subtract your overall costs, then divide by your overall costs: ROI = (Revenue - Cost of goods sold) / Cost of goods sold.
Example
Let's say you have a product that costs £100 to produce, and sells for £200. You sell 6 of these products as a result of advertising them on Google Ads. Your total sales are £1,200, and your Google Ads costs are £200. Your ROI is (£1,200-(£600+£200))/(£600+£200), or 50%.
To help measure your Google Ads ROI, you'll need to track conversions, actions that you want your customers to take on your website after clicking your ad, such as a purchase, sign-up or download. Try conversion tracking or Google Analytics, free tools to help you track conversions in your account.
ROI is typically the most important measurement for retailers because it shows the real effect that Google Ads has on your business. While it's helpful to know the number of clicks and impressions that you get, it's even better to know how your ads and listings are contributing to the success of your business.
