Here is the information explaining why we request the profit per product to help us calculate the exact ROI

for your Adwords campaign. Ultimately, this ROI calculation will help our team to determine the best way to spend your advertising dollars. Recall, the goal is to find the keywords that are really driving the most profit and not just the most traffic. The story below outlines the theory and process more clearly so you can understand exactly how this all works.

The ROI metric can be defined in two ways: the revenue generated for every dollar spent on ads, or the amount of profit generated from every dollar spent on ads. I'm going to focus on profit here, since that's what most advertisers inquire about.

AdWords will automatically track the amount spent on ads but you, as the business owner, must define the profit every time a conversion takes place. If every transaction has the same profit (e.g. when you sell a subscription or product for a fixed price), you can always set the same numeric value that represents your profit for the conversion.
For this ROI Example we will use a camera shop that sells photography equipment and provides photography classes. Clearly the keywords 'photography' and 'photography classes' could both potentially be valuable. However, how do you determine which keyword has the greater potential ROI for the business?

Assume that you have a daily advertising budget of $100. The keyword 'photography' generates 110 clicks, resulting in$120 in sales, but it also costs you $60 a day. This results in an ROI of 200% for that keyword. The keyword 'photography classes' uses only $25 of the daily advertising budget, but generates 40 clicks. These clicks result in $90 in sales, with an effective ROI of 360%.

K y od ewr Photog phy ra Photog phyC sses ra la

C k lic s 10 1 4 0

Cs ot 6 0 2 5

S le R v n e a s eeu 10 2 9 0

R I% O 20 0 30 6

CC P $ 0 5 .5 $ 0 3 .6

This advertiser would be better served allocating more of their budget to the 'photography classes' keyword because of its higher ROI, despite the fewer clicks for this keyword. Without this information we are left targeting keywords by the
CPC and as you can see this would have led to us selecting the wrong keyword as the better choice.

Company Registration Number: GB 06737350 VAT Registration Number: 832445536 Registered Office: Berkshire House, 252-256 Kings Road, Reading, Berkshire, RG1 4HP.

This story illustrate how it is possible to miss out on potential profit if close

attention isn't paid to the one metric that often matters the most: ROI. And while impressions, clicks, CTR and costs are all important components that contribute to the ROI, these metrics only show part of the picture.
In Adwords the advanced conversion tracking option enables you to define a value for each product and/or transaction. Using the value of the transaction and the cost data, AdWords can share an accurate cost per conversion. Once conversion tracking is active, you'll see a few new columns in your Adwords account interface. These accounts are Conv. Rate Cost/Conv. Conversions
(Conv. is the abbreviation for Conversions)

However, you will notice that ROI is not one of the new columns present in the Adwords inteface. To see your ROI based on the conversion tracking information we need to run a Keyword Performance report. This will include the 'Value/cost' column (which is your ROI expressed as a percent). Note that if you desire we can email you this 'ROI Report by Keyword' every Monday.
For your reference, here is an example of such a report, with the Value/cost column highlighted:

With your report in hand, you can see the ROI for every campaign, Ad group and Keyword. Any time the Value/cost is greater than 100%, you're making money, and the higher the value, the more profit you're making. I hope you have found this short document helpful in understanding how RTN Europe wishes to serve you to the best of our abilities. The beauty of Online Marketing is the data that is readily available so one can get accurate facts to help make better business

Company Registration Number: GB 06737350 VAT Registration Number: 832445536 Registered Office: Berkshire House, 252-256 Kings Road, Reading, Berkshire, RG1 4HP.

decisions. In closing, I trust with this new understanding your company will be willing to share this more sensitive information so that we can build for a larger return on investment. If you have any questions please contact me and we can discuss the Adwords ROI model in further detail.

Company Registration Number: GB 06737350 VAT Registration Number: 832445536 Registered Office: Berkshire House, 252-256 Kings Road, Reading, Berkshire, RG1 4HP.