FAQ

• What is ROAS?

  ROAS stands for Return on Advertising Spend and is a type of portfolio bid strategy. ROAS is the average conversion value that is received in return for every dollar spent on advertising. Essentially, it tells you if your advertising budget and strategies are generating sufficient revenue – that is, to what degree are you earning money based on what you spent on advertising. ROAS is typically displayed as a ratio of money generated via advertising to the cost of that advertising; for example, a ROAS of 4:1 shows $4 of revenue generated for every $1 spent on advertising. A “good” ROAS can vary wildly from business to business – some can grow substantially at 4:1, while others might require 10:1 to survive. It depends largely on the overall health and metrics of the business in question.
  
  It is therefore important to note that ROAS is not necessarily an indication of profit, but rather an indication of the efficiency of a particular advertising strategy. As such, ROAS is particularly insightful when deciding where and how to allocate funds for advertising, and in evaluating which advertising methods are working or how advertising can be improved.
  

• How do you calculate ROAS?

  The formula to calculate ROAS is quite simple; just divide the revenue produced by the advertising by the dollar amount spent on that particular campaign. For example, let’s say a business spends $1,500 per month on an online advertising campaign that results in a revenue of $5,000. The formula to calculate ROAS would be as follows:
  
  ROAS = $5,000 / $1,500
  ROAS = 3.33
  
  This means that for each dollar spent on that online advertising campaign, the business earned $3.33. Knowing how to calculate ROAS and understanding the resulting number is crucial for business owners, as it will show whether or not an advertising campaign is working to bring in sales. If not, the money dedicated to an advertising method with a lower ROAS can be appropriately re-allocated.
  When calculating ROAS, it’s important to remember that the cost of an advertising campaign can go beyond just the listing fees. Don’t forget to include any partner or vendor costs and affiliate commissions in the calculation of your ROAS – failing to do so can result in a skewed number, which means its effectiveness as a metric is compromised. An accurate view of ROAS will help inform long-term budgets and marketing strategies.
  

• What’s the difference between ROAS and ROI?

  At first glance, Return on Advertising Spend (ROAS) and Return on Investment (ROI) may seem like the same thing. After all, advertising is an investment, and the money earned as a result seems to fit the definition of a Return on Investment. However, the important distinction here is in the terms revenue and profit. ROAS looks at revenue – or money generated as a result of advertising – whereas ROI looks principally at profit, which is the money that remains after all other expenses are accounted for. Profit is also known as the “bottom line” or net income. To know your ROI, you’ll need a formula like the one used to calculate ROAS:
  
  ROI = Profits from advertising / Cost of advertising
  
  However, calculating ROI also means calculating the profit earned from individual ads, which involves subtracting the cost of the ads, the cost of goods sold, and any allocated operating costs. This is a significantly more complicated process than calculating ROAS, as it likely involves the participation of multiple departments across one business and policies for allocating operating costs that may not be clearly defined when it comes to individual sales.
  

• Why can’t I see my ads?

  After spending time and money crafting a marketing campaign, it can be frustrating if your ads do not show up when you Google search one of your keywords. However, not seeing an ad isn’t necessarily an indication that Ads isn’t working. There are a few reasons why your ads may not show up right away – the most common reason is that your keywords were outbid by another user. Another thing to keep in mind is that Google Ads do not show up every time a search is performed; some ads only show up every third search. This is particularly true if your keyword was outbid by a competitor.
  
  Also remember that even if you have previously seen your ad on Google, if you don’t click on it, Google may think that you are not interested and will stop showing you that ad. Similarly, your ad may not be on the first page of results, but perhaps the second or even the third. Finally, Google may not show your ad if you are searching via the IP address you used during the creation of the ad, or you may already have reached your daily AdWords quota at the time of your search.
  

• How many campaigns/ads/keywords can I upload in my account?

  Google Ads accounts do come with limits on the number of campaigns, ads, and keywords that can be uploaded to any one account. The limits are generous and small business owners may never notice them, but they are worth keeping in mind when you begin crafting a marketing strategy. Currently, the limits on campaigns and ad groups stand at 10,000 campaigns per account, whether active or paused. Users can have up to 20,000 ad groups per campaign, as well as 20,000 ad group targeting items, like keywords and audience lists.
  
  In terms of ad limits, each account may have 300 image ads per ad group and 50 active text or non-image ads per ad group. Users can have 4 million ads per account, but this includes paused ads as well as active ads.
  Finally, users can have up to 3 million keywords per account. There are also limits to negative keywords, with a limit of 20 shared negative keyword lists and 10,000 negative keywords per ad campaign. Items that are removed will not count against your account limits.
  

• How can I link my Analytics account with AdWords account?

  Linking your Analytics account to your AdWords account can give you a more complete picture of how customers interact with your marketing strategies. In doing so, you’ll be able to follow the customer’s entire experience, from viewing ad impressions and clicks to consuming content and finally making a purchase. Having access to richer data can help you improve your advertising strategy and, hopefully, increase sales. Luckily, the process to link Google Ads and Analytics is fairly straightforward.
  First, make sure that your account has Edit permission for Analytics, as well as administrative access to the Ads account. These settings can be modified or removed after the linking process is complete. Then, sign in to Google Analytics and go to the Admin page, where you’ll need to navigate to the property you want to link. In the property column, select Google Ads Linking and then + New Link Group. From there, you can select the specific Google Ads accounts that you wish to link and define any specific parameters, like whether or not you want to enable auto-tagging. Finally, click “link accounts” and the process will be complete. You can edit or unlink your accounts at any time.
  

• What is quality score? How is it calculated?

  Quality score is more or less exactly what its name suggests – it is a numerical estimate of how relevant your keywords, ads, and landing pages are to a potential customer. A quality score is akin to a credit score: it is in your financial interest to have as high a score as possible. Quality score is used to determine your cost per click, and a higher quality score means a lower CPC and a higher Ad Rank. In other words, a high-quality score means you’ll get more traffic to your site while paying less for clicks, leads, and conversions.
  
  A quality score is a number between 1 and 10, with 10 being the highest possible quality score. There are a number of factors that are considered when calculating a quality score, though the exact weight of each factor is known only to Google. The most significant factor is clickthrough rate or the number of people who view your ad and then click on it. A high CTR percentage means that your ads are relevant to your audience – this is a positive contributor to a good quality score. To that end, keyword relevance is another factor in the calculation of the quality score – the keyword searched by customer must match the keywords in your ad group and in the ad itself. Finally, the quality of your landing page is also taken into account when calculating quality score; Google crawlers will periodically visit your landing page to assess its relevance, originality, and navigability.
  

• Do Google ads really work?

  Google is one of the most profitable companies on the planet, and it’s for a reason: because people use it. This is also true of Google Ads; in fact, some of Google Ads’ biggest users spend upwards of $40 million annually – they wouldn’t do that if a product didn’t bring in great revenue. Whether or not Google Ads will work for you depends largely on how well you manage it; done correctly, Ads should help you boost sales and deliver a strong return on investment. In fact, there is evidence to suggest that paid search traffic converts twice as much as organic traffic.
  
  The most important thing you can do to increase your profitability with Google Ads is to learn how to use Ads well. This is a time-consuming process, but learning the ins and outs of paid search will help you craft a marketing strategy that is both cost-effective to implement and that will increase sales. Simply setting Ads on auto-pilot will likely result in frustration and a wasted advertising budget; instead, take the time to understand things like account structure, match types, negative keywords, and bidding strategies in order to maximize Google Ads’ effectiveness and make it work for you.
  

• What is smart shopping?

  Smart Shopping is a campaign type within Google Ads that use a combination of shopping ads and display ads across Google’s search and display networks. The goal of Smart Shopping is to simplify advertising by having ads appear across multiple Google networks at once – this includes sites like YouTube and Gmail – rather than only appearing on the Google search display. The main benefit to Smart Shopping is that advertisers can increase their exposure across multiple platforms with a number of ad types, using a marketing strategy that is very quick and easy to set up. Smart Shopping is ideal for anyone who lacks the time to set up their own full-scale marketing strategy or who cannot afford to hire an expert.
  In a Smart Shopping campaign, Google will pull from your product feed and try different combinations of given images and text in your Google Merchant Center to show a variety of ads across their networks. Google will also automate ad placement and bidding to maximize conversion values at whatever budget you choose. To get started with Smart Shopping in Google Ads, you need only to set a budget and an image for any display ads. Setting a target ROAS is optional but recommended.
  

• How do remarketing ads work?

  Remarketing is primarily a way to connect with previous customers or others who have previously interacted with your online content. Remarketing allows you to push targeted ads to people who have already viewed your website, to keep your brand fresh in their minds and hopefully drive them to become repeat customers, thus increasing conversion rates and ROI. If you already use Google Ads, all you have to do to implement a remarketing strategy is add a piece of remarketing code to your website; then, visitors to your site will be added to your remarketing audience through browser cookies.
  
  Once this code is added, anyone who has already visited your site will see targeted ads for your brand across all Google networks, including YouTube and Gmail. Remarketing ads can also be customized to entice previous visitors to your site to come back and make a purchase by promoting things like free shipping or a discount. Remarketing is a particularly effective advertising strategy because it creates brand recognition, which means visitors are more likely to purchase from you. In fact, click-through and conversion rates for remarketing ads are two to three times higher than regular display ads.