What is a Good ROI for Google Ads?

Updated: September 12, 2022
What is a Good ROI for Google Ads?
Google Ads ROI

New to the world of paid advertising campaigns and digital marketing? If your business has decided to take the plunge and level up your website traffic by using Google Ads, it can be hard to know how to measure your campaign success and what to expect by way of an ROI.

Instead of throwing caution to the wind, we’ve walked through the basics of strategising and setting up your first Google Ads campaign and when to expect an ROI. Further to that, we’ve offered a few key ways you can measure the success of your efforts and how, when, and where to make tweaks to maximise your ROI.

Getting Started with Google Ads Campaigns

If you’ve been interested in diving into the world of paid advertising campaigns but want to minimise your resource waste and maximise your ROI, we’re here to help you get started. One of Google’s powerhouse weapons is helping online businesses, eCommerce sites, and growing brands find, connect with, and drive more traffic online meaning that a well designed and structured Google Ads campaign can far surpass its cost when it comes to a meaningful return on investment. (Thought you were looking for Google Adwords–just a quick note on that. Google rebranded Google Adwords to Google Ads in 2018. Same platform, shorter name.)

For those trialling out paid search ads for the first time, a Google Ads project breakdown will look something like this:

  1. Deciding on your campaign parameters

To run a successful campaign, you’ll need to drill down into the parameters that guide the whole project. At its most basic, this will include:

  • Targeted consumer–particularly important is you serve more than one persona type
  • Campaign style–from video ads to display ads, the sky’s the limit when it comes to choosing the right medium to connect with your people
  • Keywords and messaging–what seems like one of the easiest decisions can actually affect the entire campaign outcome. More on this later, but there are ways you can drill down into your existing SEO data to choose the keywords that will most effectively find and connect with your audience.
  • Messaging, creative–different from choosing relevant keywords, the rest of your campaign will need the right creative messaging and style to convert your target audience.
  • Geographic area–while eCommerce stores that ship worldwide may be able to retarget global consumers, you may have more success by running customised campaigns within different geographic regions that better fit the campaign needs of your demographic. Running a brick-and-mortar shop? You’ll need to make sure you define the right geographic area to best play by Google’s rules.
  • Follow on actions–from landing page design and messaging to any definitive follow-up actions or CTAs (calls-to-action), what happens after a customer clicks through your ad can mean the difference between a conversion and losing a potential lead.
  • Budget: it’s important to confirm what your total ad spend is before beginning your campaign design. Why? We’ll detail some of the most influential advertising costs below but it is incredibly important to confirm cost expectations ahead of time.

Overwhelmed? You don’t have to be. It’s worthwhile remembering that one of Google’s number one priorities is connecting search users with the most relevant information to their online behaviour and search queries. This means your website, your campaign messaging, and defined target location (among many other factors!) will all be considered by Google’s backend when deciding who your ad should be shown to. Although there are a number of contributing factors that will influence the success of your ad efforts, we’ve detailed a few below that can have considerable impact on your project outcome that we think are particularly important to pay attention to.

Wondering how all of this affects your return on investment when paying for a Google Ads campaign? Fear not–and read on.

The Most Important Elements of a Successful Google Ads Campaigns

To get the most bang for your buck, it’s important to know the factors that will most directly affect the outcome of your Google Ads campaign. Wanting all advertisers and small business owners to achieve an excellent ROI on their digital marketing efforts, considering and paying particular focus to the below elements may result in a more successful campaign.

  1. Focus on relevant keywords.

Thought you could jazz up your Google Ads campaign by adding in some flashy wording and an extraordinarily bold statement? While that could catch the eye of your consumer assuming it matches your brand style–trying to get more click-throughs on your paid ad by using irrelevant but attention-grabbing keywords will only hurt you in the long run.

Remember–Google is trying to match search engine users with the most relevant information that will match their search queries or broad stroke user behaviour online. Trying to interrupt an impressively busy online space and grabbing the attention of new leads by using irrelevant keywords or messaging will not only ensure your leads drop off after they click through–it could also hurt your overall ad Quality Score and Ad Rank.

Why? One, consumers don’t like clickbait–they are interested in the brands that accurately meet their interests and needs and are expecting consistent follow through from a paid ad through to a follow-on landing page. Secondly, if you’re interested in a strong ROI for your paid ad efforts, losing consumers who drop-off as soon as they click-through to an unrelated landing page is significantly less likely to result in a strong conversion rate–meaning your dollars are going to waste.

  1. Take advantage of Your Google Ads Account and a PPC planning template.

Want to maximise your chances of a google paid ad campaign? We recommend using Google Ads’ PPC planning template to ensure that each of the influential factors that can affect your overall ad score are considered and within Google’s recommended framework. From character limits to showing you the overall score (or ranking) of a potential ad keyword, online PPC planning tools like the one offered by Google can help set up your ad for success before it goes live.

(Wondering how to access this template? You’ll be able to find it once you set up your Google Ads account. This portal will help you manage your ad spend and ad budget, track Google Ads costs, and keep access to a host of other free tools.)

  1. Pay attention to your quality score and ad rank.

Unfamiliar with Ad Rank, Bidding, and Quality Score? These are Google Ads and PPC (pay-per-click) specific advertising terms that are important to get (loosely) on top of. Why?

Quality Score measures some of the most important factors of your campaign that will influence its outcome and the effectiveness of your ad spend. From CTR benchmarks to the quality of your landing page, the quality score of your Google Ads campaign is important to keep an eye on from day one. (Even before you launch!)

Ad Rank influences your ad placement–meaning, it indicates where on a search engine your ad will show up. In short, the higher you rank, the more people who will be shown your ad–and vice versa. One of the contributing factors to a high Ad Rank is your Quality Score, meaning that each of the influential factors affecting the outcome of your ad are interrelated. Where one is increased, the other should follow. (Also, it’s good to know that Rank is also influenced by your campaign budget, but more on that another day.)

  1. Review your ad landing page.

The effort doesn’t stop at your ad design–the follow on landing page the leads visit after clicking through your ad is vitally important.

Why? Further to the relevancy of your keywords and messaging that match the customer’s expectations of your landing page, there should be clear actions and information that support the lead’s effort for following through.

Remember–most Google users want something from their search engine results or visited sites. Your landing page should offer a clear solution to their problem–be it a physical or intangible solution like a product or service or the information and content they were searching for.

From clear calls-to-action to relevant messaging and information, the layout, design, and content included on the landing page will have a major impact on your end conversion rate.

Identifying a Good ROI for Your Google Ads Campaign

Remember this? Everything up until this point was leading here–how you can support your chances of maximising your ROI when launching a Google Ads campaign. Now that you’re aware of some of the most important factors that will influence your campaign success, we should note that the standard return on investment for well designed Google Ads campaigns is:

  • Any ROI that is 100% or higher!

100%! In industry terms, this is often identified as a 2:1 return. For every one dollar spent, the advertiser expects an average of $2 in return from new leads, sales, and engagement. Shocked? Some businesses–with extremely effective and well tailored campaigns–will target a 400% return on investment or higher, so sure that paid advertising campaigns are worth their salt.

It’s important to note that there are two commonly used terms in the advertising industry that can measure the success of your Google Ads campaign and one shouldn’t be confused with the other. These include:

  • Return on Investment (ROI)
  • Return on Ad Spend (ROAS)

At a top level, both can be defined as:

  • ROI: is how much your net profit is in relation to your costs–showing a more accurate depiction of what it cost you to earn the increased income.
  • ROAS: return on ad spend is a more generic indicator that simply shows how much you spent in comparison to how much you earned. While this metric can show you quickly how much profit was generated by your ad, it doesn’t consider the costs required to produce the campaign. ROI can provide a clearer depiction of the end result on your bottom line whereas ROAS only considers the total ad spend.

That said, there is also an industry average difference between the two metrics. As mentioned, ROI for Google Ads campaigns is set (by Google) as 100% or 2:1 for every dollar spent. The average ROAS for Google Ads campaigns is a whopping 400% or 4:1–with some businesses targeting upwards of 800% on their Google Ads performance!

How to Determine Your Google Ads Costs and Budget

We get it–advertising budgets are tight and you want to make sure that where you spend money is going to result in a great ROI. While every business, industry, and digital marketing team will have a different lump sum to work with, you can influence the success of your campaign (no matter the budget!) by following some of the Google Ads best practices above.

Trying to get your dollars’ worth? When weighing up where to spend your money to get the most out of your paid advertising campaign, some of the more influential factors should include:

  1. Your bidding strategy:
    Shocked that there’s one more thing to know? Don’t be–because your ad is going to see you paying for each customer click-through, naturally, there is going to be some online competition to similar audience members and keywords. Fortunately, there are ways to best manage your ad spend budget–choosing relevant but affordably priced keywords is one option as is opting for manual bidding in lieu of automated bidding. More on these topics another day.
  2. Cost per acquisition:
    Trying to get the most for your money? You can opt for a CPA (cost-per-acquisition) Google Ads campaign to only pay for your efforts when a lead converts to a paying customer. While this strategy can cost more at a top level, the cost is deducted from the profit gained by the new customer.
  3. Campaign type:
    Remember us quickly mentioning the different types of paid online advertising campaigns you can choose to launch? Including search campaigns on the Google Search Network to display ads and video display, each has a different cost associated with its cost-per-click and pay-per-click. Knowing which is going to influence your total ad spend–and which is likely to best connect with your customers and result in the best ROI–is just one way you can save in some places to spend more on others.

Strategising Your Best ROI for a Google Ads Campaign

Think you’re ready to dive in? The world of online paid advertising can result in a significant uptake in new online traffic, leads, and customers. While the art to defining your campaigns may take a bit of leg work, you can see an enormous return on investment for your Google Ads campaigns that makes it well worth the effort.

Interested in learning more about digital marketing, paid advertising, and search engine optimisation? Edge Marketing is an Australian specialist in all things digital marketing and supports both our clients and online community to achieve their best online advertising results.

Follow on with our blog to deepen your knowledge about paid advertising campaigns and how you can get started bringing in more online traffic today.


Mira -

Head of Paid Media

1300 558 659 - www.edgeonline.com.au

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