How to Track ROI for Google Ads
Don’t Play a Guessing Game – Leverage the Data
Don’t be satisfied with vanity metrics like high click through rates (CTRs) and page impressions. These may look good but they don’t necessarily indicate that your ad campaign is resulting in active engagement or conversions, and they don’t provide the data needed to make meaningful campaign decisions or improve your strategies.
What you really need is to delve deep to understand the effectiveness of your Google Ads and track your ROI – understand which campaigns, ad groups and keywords are driving the most valuable actions for your business.
Leverage the power of Google Analytics, Google Tag Manager and robust conversion data as a source of actionable metrics. This will give you meaningful insights and reflect real-world business outcomes to help you measure your progress.
What you’re mainly looking for when it comes to tracking data is conversions. If you have an ecommerce site a conversion will most likely be a completed purchase. For service-based businesses conversions can be things like phone call clicks, email sign-ups, contact requests, quote enquiries or even resource downloads.
You’ll also need to look at website engagement metrics – time spent on key pages, the number of pages visited and so on.
A Step-by-Step Guide to Tracking your Google Ads Data
Step 1: Set Up Conversion Tracking in Google Ads
Google Ads has its own built-in conversion tracking, and it's essential to get this set up correctly. This allows Google to directly attribute conversions to your ad campaigns. Here's how:
Navigate to Tools & Settings: In your Google Ads account, click on “Tools & Settings” in the top menu.
Select Conversions: Under the “Measurement” section, click on “Conversions.”
Create a New Conversion Action: Click the blue “+” button to add a new conversion action.
Choose Your Conversion Source: Select the type of conversion you want to track:
Website: For actions on your website like purchases, form submissions, and page views.
App: For in-app actions.
Phone calls: For calls originating from your ads or website.
Import: For offline conversions (e.g., sales closed after a lead generated through Google Ads).
Configure Your Conversion Action: Follow the prompts to define the specifics of your conversion. This will involve:
Name: Give your conversion action a clear and descriptive name (e.g., “Purchase,” “Contact Form Submission”).
Category: Select a relevant category to help Google understand the type of conversion.
Value: Assign a value to each conversion. This is crucial for calculating ROI. For e-commerce, you can track dynamic transaction values. For leads, you can assign an average value based on your sales data.
Count: Decide whether to count every conversion or only one per ad click. For purchases, you’d count every conversion. For lead form submissions, you might count only one.
Click-through Conversion Window: Set the timeframe within which a click can lead to a conversion.
Attribution Model: Choose how credit for the conversion is assigned to different ad interactions on the path to conversion (e.g., last click, first click, linear, time decay, position-based, data-driven).
Implementation: Depending on the conversion source you choose, you’ll need to implement a tracking code (Google Ads tag) on your website or configure call tracking. Google Ads will provide the necessary code snippets or instructions.
Step 2: Unleashing the Power of Google Analytics
Google Analytics provides a wealth of information about how users behave on your website after they click through from your ads. Integrating Analytics with Google Ads unlocks deeper insights into the quality of your traffic and the user journey through the conversion funnel.
- Linking Google Ads and Google Analytics:
- Navigate to Admin in Google Analytics: Click on the “Admin” gear icon in the bottom-left corner.
- Select the Relevant Property: Ensure you’ve selected the Google Analytics property associated with your website.
- Click on Google Ads Linking: Under the “Product Linking” section, click on “Google Ads Linking.”
- Select Your Google Ads Account: Click the “+” New link group button and select the Google Ads account you want to link.
- Confirm and Enable Auto-tagging: Ensure “Enable auto-tagging” is selected. This automatically adds a gclid parameter to your ad URLs, allowing Analytics to track which Google Ads clicks brought users to your site.
- Link Configuration: Give your link group a name and select the data views you want to link. Click “Link accounts.”
- Tracking Goals in Google Analytics: Goals in Google Analytics are actions you define as valuable conversions. These can mirror your Google Ads conversions or track website engagement metrics.
- Navigate to Admin in Google Analytics: Click on the “Admin” gear icon.
- Select the Relevant View: Choose the data view where you want to configure goals.
- Click on Goals: Under the “View” column, click on “Goals.”
- Create a New Goal: Click the “+ New Goal” button.
- Choose a Goal Setup: You can use a template or create a custom goal.
- Define Your Goal Type: Select the type of action you want to track:
- Destination: Tracks when a user reaches a specific page (e.g., a thank-you page after a form submission).
- Duration: Tracks sessions that last a certain amount of time.
- Pages/Screens per session: Tracks sessions where users view a specific number of pages.
- Event: Tracks specific user interactions like button clicks, video plays, or file downloads (requires implementation via Google Tag Manager or website code).
- Goal Details: Provide the necessary information based on your chosen goal type (e.g., the destination URL, the duration threshold, the event category and action).
- Verify Your Goal: Use the “Verify this Goal” link to see if any historical data matches your goal criteria.
- Save Your Goal.
- Analysing Google Analytics Data for Google Ads Performance: Once linked and goals are set up, you can analyse your Google Ads performance within Google Analytics by navigating to Acquisition > Google Ads. Here you’ll find reports on:
- Campaigns, Ad Groups, Keywords: See which elements are driving the most valuable traffic and conversions.
- Landing Pages: Analyse the performance of your landing pages in terms of bounce rate, session duration, and goal completion.
- Search Queries: Understand the actual search terms that triggered your ads and identify opportunities for optimisation or negative keywords.
- Hour of Day and Day of Week: Identify patterns in user behaviour and optimise your ad scheduling.
- Demographics and Interests: Gain insights into the characteristics of your converting users.
By comparing your Google Ads cost data (automatically imported when linked) with your Google Analytics goal completions and their associated values, you can start to calculate your ROI.
Step 3: Using Google Tag Manager for Advanced Tracking
Google Analytics provides a wealth of information about how users behave on your website after they click through from your ads. Integrating Analytics with Google Ads unlocks deeper insights into the quality of your traffic and the user journey through the conversion funnel.
Google Tag Manager (GTM) is a powerful tool that allows you to manage and deploy website tracking codes (tags) without directly editing your website’s code. It’s particularly useful for setting up more complex conversion tracking scenarios, especially those involving events in Google Analytics.
Using GTM for conversion tracking gives you the advantages of:
Centralised Management: Manage all your tracking codes in one place.
Flexibility: Track a wide range of user interactions as events.
Speed and Efficiency: Deploy and update tags quickly without developer involvement.
Version Control: Track changes and easily revert to previous configurations.
Here’s some of the conversion metrics you can track with GTM:
Tracking Button Clicks: Track clicks on specific call-to-action buttons (e.g., “Download Now,” “Request a Quote”).
Tracking Form Submissions (Beyond Thank You Pages): If you don’t have a dedicated thank-you page, you can track successful form submissions using GTM’s event listeners.
Tracking Video Plays: Measure engagement with embedded videos.
Tracking File Downloads: See how many users are downloading your resources.
Enhanced E-commerce Tracking: Implement detailed e-commerce tracking in Google Analytics to analyse product performance, purchase behaviour, and more.
How to set up Event Tracking in GTM
Create a Google Tag Manager Account and Container: If you don’t have one already, set up an account and create a container for your website.
Install the Google Tag Manager Snippet: Add the GTM container code to every page of your website.
Create Triggers: Triggers define when a tag should fire. For example, a click trigger for a specific button or a form submission trigger.
Create Tags: Tags are the actual tracking codes you want to fire. For event tracking in Google Analytics, you’ll create a “Google Analytics: Universal Analytics” tag with the “Track Type” set to “Event.” Configure the Event Category, Action, Label, and Value based on the interaction you want to track.
Configure Variables: Variables store information that triggers and tags can use. GTM has built-in variables, and you can also create user-defined variables to capture specific data.
Test and Publish: Use GTM’s Preview mode to test your tags before publishing them live.
Once you’ve set up event tracking in GTM and linked it to Google Analytics, these events will appear as goals in your Analytics reports, providing a richer understanding of user engagement driven by your Google Ads.
Step 4: Calculate Your Google Ads ROI
Time to put on your thinking cap. With accurate conversion tracking in place, you can finally calculate your Google Ads ROI. The basic formula is:
| ROI = | Revenue from conversions - total ad spend | x 100% |
| Total ad spend |
Revenue from Conversions – the total value generated from the conversions attributed to your Google Ads. For e-commerce this would be the total sales revenue; for leads it is the estimated revenue generated from those leads that converted into customers.
Total Ad Spend – the total cost you’ve incurred for your Google Ads campaigns during the reporting period.
Once you are consistently tracking your ROI you will be able to use the data to analyse and optimise to your heart’s content, for example:
Identify High-Performing Campaigns, Ad Groups, and Keywords: Focus your budget and efforts on what’s delivering the best ROI.
Pause or Optimise Underperforming Elements: Identify campaigns, ad groups, and keywords with low or negative ROI and either optimise them (improve ad copy, landing pages, targeting) or pause them.
Refine Targeting: Analyse the demographics, locations, and devices of your converting users and adjust your targeting accordingly.
Optimise Landing Pages: Ensure your landing pages are relevant to your ad copy and provide a seamless user experience that encourages conversions.
Experiment with Ad Copy and Placements: Continuously test different ad creatives and placements to see what resonates best with your target audience and drives higher conversion rates.
Adjust Bids: Optimise your bidding strategies based on conversion data and ROI goals.
Robust Conversion Tracking is Well Worth the Effort
If you’re serious about making Google Ads pay you can’t afford not to implement robust conversion tracking as described here to gain the clarity needed to measure your ROI. This approach will ensure your campaigns are optimised for maximum profitability. If you’d like some expert help with your PPC campaign get in touch with the PPC professionals at Dentons Digital.
