A lot of advertisers perform campaign optimizations based solely on conversion rate or cost per conversion, choosing the ads and keywords with the best metric and calling it a day.
For ecommerce goal analysis the method of calculation is similar. The biggest difference in the Ecommerce data is that it’s real and accurate compared to a lead form’s estimated goal value.
In Adwords, we can look at the money we spent to reach our goals in the same time frame. Compare that with the purchases made through CPC and we have a precise number we can confidently call ROI.
Lead Generation
Conversion rates (found in Google Analytics)
Conversions (found in Google Analytics)
ECommerce
ROI (found in Google Analytics and Adwords)
Revenue (found in Google Analytics)
I’ve always found that ROI is one of those terms that has been over-used and abused by so many people and as such, there is confusion on how best to calculate it. Personally, I like to use the following formula when we are discussing the ROI for any PPC campaign:
