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# How to know the ROI of a campaign?

[ Edited ]May 2015 - last edited May 2015

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Hello Marketers,

I have a question regrades the ROI of a campaign. If i have a campaign with a CPA of **60$**. and in Analytics, i have seen that the average order value (AOV) for this campaign is **437$**. So what the ROI of this campaign and what is the used formulas to know the ROI.

*In AdWords Support, i have crossed by this example:*

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 AdWords, so your total cost is $600 and your total sales is $1200. Let's say your AdWords costs are $200, for a total cost of $800. Your ROI is:

*($1200 - $800) / $800*

*= $400 / $800*

*= 50%*

But i was totally lost when it mentioned ** "Let's say your AdWords costs are $200" **so $200 for what exactly ??

looking forward to know this and thanks for your help mates

*verified_user*

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## Re: How to know the ROI of a campaign?

[ Edited ]May 2015 - last edited May 2015

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Hi Hossam,

The role of AOV is basically how much you have gained in terms of revenue. In your case your AOV is 437$ per order (this is basically revenue) & your cost of investment will be (60$ which is the adwords cost to gain that conversion + cost of production for that product).

ROI = (437 - total Cost)/ Total Cost

In Google's example $200 is for the adwords advertising cost.

Hope this helps!

Cheers!

Rinkal

## Re: How to know the ROI of a campaign?

May 2015

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In your case your cost is $60.00 CPA + whatever the cost is to produce the product. To properly calculate ROI you need to account for both the cost of the product production and the spend associated with the marketing efforts.

Hope that helps.

Kim

Kim Clink,

**AdWords Top Contributor**| Community Profile | Twitter | Clink Digital Marketing

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## Re: How to know the ROI of a campaign?

May 2015

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Hi Hossam,

To calculate the ROI, the formula is very simple:

Hope this helps!

Cheers,

Rinkal

## Re: How to know the ROI of a campaign?

May 2015

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Thanks for your answer, everything is going to be clear for me if i only knew what is the (Average Order Value) and what AOV has to do in my example?

thanks

## Re: How to know the ROI of a campaign?

May 2015

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Thanks for your help. The formula of ROI i knew it but in my example there is a new component which is (AOV) .. I just want to know its role

thanks again

## Re: How to know the ROI of a campaign?

May 2015

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aov = total conversion value / conversions

for example --

aov = total sales revenue / total number of sales

## Re: How to know the ROI of a campaign?

May 2015

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Thanks for that. So we have the total sales revenue but we don't have the number of sales. Should i imagine a number in this case ?

## Re: How to know the ROI of a campaign?

[ Edited ]May 2015 - last edited May 2015

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Hi Hossam,

The role of AOV is basically how much you have gained in terms of revenue. In your case your AOV is 437$ per order (this is basically revenue) & your cost of investment will be (60$ which is the adwords cost to gain that conversion + cost of production for that product).

ROI = (437 - total Cost)/ Total Cost

In Google's example $200 is for the adwords advertising cost.

Hope this helps!

Cheers!

Rinkal

## Re: How to know the ROI of a campaign?

May 2015

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