Estimate the profitability of a Google Ads campaign in advance

[Shishirgano9]

Two questions remain:
How many conversions (i.e. customers) do you get from your AdWords ads? ... and
Are AdWords campaigns worthwhile regardless of the industry and products?
Question 1 cannot be answered in general terms - you guessed it. The conversion rate depends in particular on the intensity of competition for the specific keywords and of course also on the quality of your AdWords campaign.

Everything has to be 100% right here – from the keywords fusion database to the ad texts to the landing pages. After all, Google also calculates a so-called quality factor for your ad . And this has a significant influence on the prices you have to pay for your clicks.

However, you can calculate – in advance – how your Google Ads campaigns must perform in order to be successful. For example, if your only conversion is the purchase of a product with a margin of EUR 100.00, then theoretically an AdWords campaign can cost a maximum of EUR 99 in order to still get an ROI greater than 1. Now, if you assume (again as an example) that a click on the AdWords ad costs EUR 1.00, you can use a maximum of 99 clicks to achieve a conversion (i.e. the purchase).

In short: In this example, you would need a conversion rate greater than 1%.

This example is intended to show how you can estimate the profitability of an AdWords campaign in advance. Questions 1 and 2 can therefore be answered by saying that a "good conversion rate" does not necessarily have to be in double figures, but that a "good conversion rate" depends on your own product margin and on external factors such as the intensity of competition (click price). The market volume (number of searches for certain keywords) must also be taken into account.