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You manage the campaigns for a baby stroller manufacturer that sells its products online and through large retailers.

You manage the campaigns for a baby stroller manufacturer that sells its products online and through large retailers. To calculate the total profits from these campaigns, you should:

  • estimate revenue based on online sales, factor out gross margins, and subtract Google Ads costs
  • estimate revenue based on the value of click, factor out gross margins, and subtract Google Ads costs
  • estimate revenue based on the value of an Google Ads customer, factor out gross margins, and subtract Google Ads costs
  • estimate revenue based on in store sales, factor out gross margins, and subtract Google Ads costs

The correct answer is:

  • estimate revenue based on the value of an Google Ads customer, factor out gross margins, and subtract Google Ads costs

Explanation: What digital marketer doesn’t want to knock their CPA and ROI targets out of the park? You’re in a profession that celebrates efficiency, and that’s a good thing. But with the relentless focus on cutting CPAs and raising ROIs, it’s easy to overlook the most important number of all: total profits.

First things first: understand the full value you’re bringing to the table. When you know how much value you create, you’ll know the extent of your profitable bid opportunities — and frankly, you’ll get more credit for your work.

Here’s our recommended approach: First, understand the full value of each Google Ads customer. Estimate her total lifetime purchases, for all conversion types (on and off the web) and including any word-of-mouth referrals she may make. Make reasonable assumptions about the value of each factor and total them to estimate revenue. Then factor out gross margins and subtract Google Ads cost to get total profit.

More read: https://support.google.com/google-ads/answer/6167126

Ali Raza

Ali Raza is a Web Developer and Digital Marketing Consultant.

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