By tracking the actions and steps users take on your business site after having clicked your ad, you can easily find out whether your ad campaign is helping you make a good profit. Return on investment is a vital metric for advertisers. It’s based on specific advertising goals and indicates the tangible effect your ad campaigns have had on your business goals.

ROI and conversions

Here are some crucial aspects to ROI and conversions:

• ROI primarily revolves around conversions. A conversion is said to have occurred when a visitor completes any logical action (that you desire) on your site.
• These denote customer actions, such as a purchase, webpage visit, sign-up or lead that are extremely valuable for a site’s visibility and profitability. In certain cases, users may simply request more information, but that can initiate him or her into buying a product.
• Tracking your conversions will let you work out the number of purchases effected and the revenue generated from your AdWords advertising efforts. The conversion tracking feature in an AdWords account allows you to check the number of sales or leads.
• The profitability of your campaign is linked more to conversions rather than the traffic volume and the number of clicks. On your part, you can go for smarter bidding and practical budgeting decisions apart from making strategic and timely changes to ad texts/ keywords.

Following are other important factors that make your AdWords campaigns profitable

1. Create separate campaigns for different products: It is advisable to create distinct campaigns for each product line, resource or brand. This will allow you to monitor and coordinate your advertising efforts more effectively. You can make the requisite adjustments to enhance your campaign performance and the end result. Be clear to yourself as what exactly you are looking to achieve with each ad campaign. Accordingly, structure it based on a specific goal.

2. Focus on right locations and languages: Targeting the right locations and languages as well as capturing the niche audience base is important.  You can opt to target your ads to specific languages and locations for each campaign (apart from choosing your budget). Target only those (languages and locations) relevant to your industry or business domain.

3. Go for highly specific ad groups: At a broader level, it is pertinent to create ad groups that are highly specific. Each ad group should ideally revolve around a single product/ service. This is to make sure that your ad will reach only the most qualified and valued users.

Build a list of key terms or placements and break them into related (or relevant) ad groups. Create ads directly pertaining to that list. For instance, if you distribute digital cameras, and you have organized your ad campaigns by brand, come up with multiple set of ad groups based on the different models of each brand. Since Google will display only one ad per advertiser on any given keyword, avoid incorporating duplicate key terms in different ad groups/campaigns.