This week as part of project 3 we had to start our Adwords campaign that needed to have at least one ad group, two ads and at least ten keywords. Even though it was very difficult to get the campaign working (my ads weren’t approved at first) it was very interesting to actually start working with Adwords and Analytics.
After having made my campaign we started measuring the conversions in the site and the ROI (return on investment). I found all the information about ROI extremely interesting because it was a concept completely new to me. One of the thing that I learned was how to calculate the ROI of my products:
“ROI is the ratio of your net profit to your costs. It’s typically the most important measurement for an advertiser because it’s based on your specific advertising goals and shows the real effect your advertising efforts have on your business. The exact method you use to calculate ROI depends upon the goals of your campaign.
One way to define ROI is:
(Revenue – Cost of goods sold) / Cost of goods sold
Let’s say you have a product that costs $100 to produce, and sells for $200. You sell 6 of these products as a result of advertising them on AdWords, so your total cost is $600 and your total sales is $1200. Let’s say your AdWords costs are $200, for a total cost of $800. Your ROI is:
($1200 – $800) / $800
= $400 / $800
In this example, you’re earning a 50% return on investment. For every $1 you spend, you get $1.50 back.”
After that we were asked to review the performance of our campaign which was also very difficult to do because my Ads didn’t seem to work. I think that setting up the ads is the easy part, having google approve them is a little tricky.
Nevertheless, I learned a lot from our discussion boards. Seeing what keywords they deleted or added gave me an idea of what I should be doing. Also, I realized that I hadn’t included negative keywords so I searched for information about this and decided to include the word “free” as a negative keyword.
What I like about the discussion boards is that we can see different projects taking shape and learn from them. For example, I have a classmate that uses free tutorials to attract customers so in her case, “free tutorials”, is one of the keywords that she is going to use.