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We just finished putting together a comprehensive online ad campaign using Google AdWords for a hospital in Chicago. We needed to create four campaigns centered around “heart attacks”, “heart disease” and other cardiovascular related topics. The set up work was kind of exhaustive as we scrubbed the keywords for searchability, effectiveness, competition, and average cost per click. We also set up a strategy for each landing page, remembering some of the rules about good landing page design. Then we needed to determine what we were going to track in the campaign in order to compute the real return on investment, or ROI. If you use AdWords’ Conversion Optimizer, it will kind of give you an ROI, but in terms of the ad spend, cost of acquisition, conversion values and some other things. However, the ROI extends beyond the campaign since there is activity that drives leads to the client that AdWords can’t track (that I am aware of); in our case with the hospital, consultations scheduled, consultations completed and ultimately, procedures. Well each of these has value that must be calculated as part of your ROI on the campaign.


where the total benefits are all of the conversions and their associated values along the way, and the total costs are what the campaign cost with click expenditures, web design, development, tracking, analysis, account service and more. In the end, we set up 8 different conversions that were cross-utilized in the other ad groups and landing pages, so when you add it all up, there were over 25 points of conversion – all having value to the client.


So we can easily see here under the “Conversion Tracking” menu that so far, only after a day of running the campaign, we have 54 conversions on Zip Code Entry. Well, we have several ads that drive you to a landing page that ask for a zip code before you can use the risk assessment tool, so if I click on each conversion, I get the following:


and now I can see that the Zip Code Entry was most successful on the Cardiac Risk Assessment Calculator conventional ad, run 1 (I talk more about how to set up AdWords campaigns for maximum efficiency and results in another post). Overall, I’m getting an 84.38% conversion rate on this particular metric, which is very good. This says that most people are OK with giving you a zip code in order to use something of perceived value, or to get to the next step in the process. So, during the campaign we will add up all of our conversions, multiply them by their respective values, and divide by campaign cost. This method will show your client much more value of what the campaign is extracting, rather than just looking at click through rates (CTR’s) and ad conversion rates.

How do you calculate ROI for online ad campaigns?