You want to generate leads with your AdWords campaign by encouraging people to fill out an
interest form on your website. What do you need to know to measure return on investment (ROI) for this campaign?
Question | Explanation | Answer
AdWords Fundamentals Certification
In general, ROI is the most important measurement for advertisers because it shows the real effect that PPC campaign has on your business. It shows how your ads are contributing to the success of your business. ROI is the ratio of your net profit to your costs.
To calculate ROI, take the revenue that resulted from your ads, subtract your overall costs, then divide by your overall costs: ROI = (Revenue – Cost of goods sold) / Cost of goods sold.
In order to calculate ROI for leads, you need to set a value. Filling a form is also a conversion which should have a value set. If your business generates leads, the cost of goods sold is just your advertising costs, and your revenue is the amount you make on a typical lead.
How much you’ve spent on the campaign compared to the value of leads generated