Google Ads is so ingrained in our daily searches, that it has become part of the search engine ecosystem. What this means is, Google Ads is less invasive than other more traditional ads, and since they are targeted, there is a high conversion rate.

Now, let’s say you have decided to start using Google Ads, the first step would be to define a clear goal for your campaign:

• Improve sales
• Generate leads
• Increase Website Traffic
• Product and Brand Consideration
• Improve Brand Awareness and Reach
• Get more Local Store Visits and Promotions

Depending on your goal there are different types of Google Ads:

1. Search: The most popular and ROI efficient. Straightforward yet unmatched. These ads will appear to anyone using Google’s main functionality: searching the web. 
2. Display: Visual ads on the web or Gmail. Great for visual striking products or services. 
3. Video: Video ads on YouTube. Best for campaigns with big budgets. 
4. Shopping: Product listings on Google
5. App: Great for digital services. Promote your app on existing channels
6. Smart: Simplified automated ads on Google based on algorithms. 
7. Local: Great for restaurants, or on-site services. Drive customers to a physical location
8. Discovery: Runs ads across Google’s feeds when they’re open

Now, there is a reason why the Search Ad is still the most reliable option: Google built its business on top of a search engine. Think of it. There is a reason why people say “…Google it,” and not “…Yahoo it.” In fact, according to GS Statcounter, Google holds 91.9 percent of the market share (2022).

So, if you want to reach your potential audience, you cannot go wrong with Search Ads.

Getting the most out of your campaign: ROI

According to Google, ROI is… the ratio of your net profit to your costs. It's typically the most important measurement for an advertiser because it's based on your specific advertising goals and shows the real effect your advertising efforts have on your business. The exact method you use to calculate ROI depends upon the goals of your campaign.

And here is a simple formula to understand the way ROI works on Google Ads:

    (Revenue - Cost of goods sold) / Cost of goods sold

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, so your total cost is $600 and your total sales is $1,200. Let's say your Google Ads costs are $200, for a total cost of $800. Your ROI is:

 ($1200 - $800) / $800

 = $400 / $800

 = 50%

In this example, you're earning a 50% return on investment. For every $1 you spend, you get $1.50 back.

ROI vs. ROAS: What should you use?

ROI (Return on Investment) and ROAS (Return on Ad Spent) are two different measures to estimate the returns of your campaign. 

The primary distinction between ROAS and ROI is that ROAS is a return ratio calculated by comparing how much you spend in ads in relation to how much you earn, whereas ROI accounts for the amount you make after deducting your expenses. The sole purpose of ROI is to determine whether a campaign is worth your investment.

Now the question is, what is a good ROAS ratio or ROI ratio for your campaign? The answer is not that simple. It varies based on individual profit margins, overall business health, and operating costs.

Some starting companies will be ok with a 50% return on investment, which also seems to be the case in Google’s previously quoted scenario. Pairing it with a $2:$1 ROAS ($2 for every $1 spent on ads) can be a sign of an effective campaign.

Still, it is important to understand your own goals and not be fooled by fixed numbers. If you want to work towards a $4:$1 ratio, or a 200% ROI, all you have to do is plan accordingly.

How to plan accordingly: Best strategies for a winning campaign

1. Optimize your website first

An unoptimized website is a waste of clicks. According to Google, 79% of users will leave a site if its optimization is poor on mobile. And those clicks are being paid directly from your budget, whether they convert or not. Offer your users a seamless navigating experience on your website to maximize your ROI.

2. Work on your quality scores

Your quality score determines your ad rank, and it is one of the most important campaign metrics to have in mind. While it is hard to pinpoint how each factor influences the results, there are several indicators to keep in mind:

• Landing page relevance and quality
• Click-through rate (CTR)
• Keywords relevance to ad groups they relate to 
• Historical performance of the Google Ads account
• Ad relevance.

Applicability is the primary quality score metric, therefore, begin by assessing your keyword organization. Make sure your keywords are organized into distinct groups and distributed across multiple ad campaigns.

3. Automate what is working for you

Automation is not an easy way out, or a lazy alternative. Automation is a tool, and therefore, you must choose the right screw for the job. Instead of automating from the beginning, focus on creating a solid campaign then automate high-performing ads. Google ads works increasingly better with performance data, so the more specific you get, the better.

4. Improve your bidding strategy

Increasing your ROI can be as simple as optimizing your bids. While increasing the budget of an ineffective pay-per-click campaign may appear to be an effective way to increase conversions, adjusting your bids is usually a far more practical approach.

Adjusting your bids through target-focused strategies such as cost-per-acquisition (CPA) and automation, can help you make the most out of your investment.

Ready to optimize your Google Ads strategy? 

Let us help you build a strategy to get better results. Stop wasting money on bad traffic and leads with your Google Ads. Start spending more intelligently with a partner you can trust. Contact us today!