Find out using Human Level’s calculator whether you will obtain positive return on investment (ROI) with your Google Ads campaign. Enter the requested values in each field, based on the campaign management costs, CPC estimate and Google Analytics data.
Terms used in this Google Ads ROI calculator
What is ROI in a Google Ads campaign?
ROI, or Return on Investment is a financial term measuring the economic value generated by an investment. ROI measures the profitability of our investment in a marketing action, i.e. it’s capability of generating value. ROI can be calculated using the following formula:
ROI = (Profit – Investment) / Investment
What is the monthly investment and management fees
The monthly investment is money directly invested in Google Ads. Google Ads campaigns are generally managed through a budget, for which we establish a maximum monthly investment. This money goes directly to Google.
Management fees, on the other hand, are fees established by a consultant or agency in charge of managing the campaign. If you manage your own campaign, then these fees will be equal to €0.
What is conversion?
Conversion is the ratio between the total number of visits obtained through Google Ads and the ones that ended up being converted: by purchasing something, by making a reservation, by requesting a quote, etc. It has a percentage value.
Where can I get the average purchase amount?
The average order value information is provided by Google Analytics, in its Ecommerce section. It calculates the average value of each purchase on our website. If we multiply the average amount by the total number of transactions, we should get the total revenue of all sales.
What is CPA or Cost per acquisition?
Cost per acquisition or CPA is the total amount invested into promoting a website to get one sale. To calculate CPA in a Google Ads campaign, we must divide the total cost of the campaign (both the investment and the management fees) by the total number of conversions. In case of recurring purchases (on average, a customer makes more than one purchase in a specified period), CPA is lower than the customer acquisition cost or CAC, as it would be equal to this customer’s acquisition cost divided by the average transactions made by each customer.
What is the Customer Acquisition Cost or CAC?
The customer acquisition cost is the total amount invested into promoting a website to get a new customer. In a worst-case scenario, when a customer only makes one purchase, it will match the value of CPA or cost-per-acquisition.