The ROI Formula
PPC ROI = (Revenue from PPC - Cost of PPC) / Cost of PPC × 100. Simple math, but accurate measurement requires proper tracking infrastructure.
What You Must Track
- Conversions: Form submissions, phone calls, purchases, chat interactions
- Revenue: Actual revenue generated from PPC leads (requires CRM integration)
- Cost Per Lead (CPL): Total ad spend ÷ number of leads
- Cost Per Acquisition (CPA): Total ad spend ÷ number of customers acquired
- Return on Ad Spend (ROAS): Revenue ÷ ad spend (e.g., 4:1 means $4 revenue per $1 spent)
- Lifetime Value (LTV): Total revenue a customer generates over their relationship
Tracking Setup
- Google Ads conversion tracking on all conversion points
- Call tracking with dynamic number insertion
- UTM parameters on all landing page URLs
- Google Analytics goals and e-commerce tracking
- CRM integration to track lead-to-customer conversion
- Offline conversion import for sales that happen by phone or in person
Reporting Best Practices
- Report on business metrics (leads, customers, revenue) not vanity metrics (impressions, clicks)
- Compare PPC ROI against other channels
- Account for the full sales cycle — PPC leads may take weeks to close
- Include assisted conversions — PPC often assists conversions that are attributed to other channels