Your client’s product costs US$50 to produce, and it sells for US$150. She’s sold 10 units and spent US$700 on her Google Ads campaign. How would you calculate her return on investment (ROI) to help her understand the benefit of using Google Ads?

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✅  The correct answer is:

[US$1500 (revenue) – US$1200 (cost + Google Ads spend)] / US$1200 (cost + Google Ads spend)

Question:

Your client’s product costs US$50 to produce, and it sells for US$150. She’s sold 10 units and spent US$700 on her Google Ads campaign. How would you calculate her return on investment (ROI) to help her understand the benefit of using Google Ads?

Solution:

  • US$1500 (revenue) / US$1200 (cost + Google Ads spend)
  • [US$1500 (revenue) – 10 (number of products sold)] / US$1200 (cost + Google Ads spend)
  • [US$150 (sales price) – US$1500 (cost)] / US$700 (Google Ads spend)
  • [US$1500 (revenue) – US$1200 (cost + Google Ads spend)] / US$1200 (cost + Google Ads spend)