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Reaffirming my understanding of Conv. Value / Cost

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# 1
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Hello,

 

I'm regularly referring to the Conv. Value / Cost column for my ecommerce clients as a means of determining profit margins from their Google Adwords setup. My understanding is that in general the higher the value, the healthier a campaign/ad group/keyword etc. is performing, and that the metric is conversion value (i.e. revenue as tracked by Google Analytics) divided by Ad spend. The value provided in the column can thus be used to determine profit margin for every £1 of Ad spend (assuming GBP). For each client, I ask them what the minimum revenue they expect to make for every £1 of Ad spend in order for them to make a profit. If they say £10 (for example), then I aim to get as many campaigns/ad groups/keywords, etc. showing the value of 10.00 or above in the Conv. Value / Cost column. Anything below this suggests to me they are making a loss.

 

Can I please ask for a 2nd opinion on the above, to ensure that my understanding is correct, and that I'm relaying it to my clients in a way that makes sense, and is sufficient for determining profit acquisition from Adwords. If I've misunderstood anything, or is there is a more advised approach, I'm happy to hear it!

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Accepted by topic author Christian G
October 2015

Re: Reaffirming my understanding of Conv. Value / Cost

Community Manager
# 2
Community Manager
Hi Christian,

This looks sound to me, but I know others have different ways of tracking ROI--depending on the complexity of the business, and whether your clients use Analytics, you can also do some more robust reporting through that interface: https://support.google.com/analytics/answer/1247853?vid=1-635799369110480957-3645851084

Cassie

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Marked as Best Answer.
Solution
Accepted by topic author Christian G
October 2015

Re: Reaffirming my understanding of Conv. Value / Cost

Community Manager
# 2
Community Manager
Hi Christian,

This looks sound to me, but I know others have different ways of tracking ROI--depending on the complexity of the business, and whether your clients use Analytics, you can also do some more robust reporting through that interface: https://support.google.com/analytics/answer/1247853?vid=1-635799369110480957-3645851084

Cassie

Re: Reaffirming my understanding of Conv. Value / Cost

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# 3
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Great, thanks Cassie!