Google Ads’ return on ad spend (ROAS), is one of the most difficult metrics. This is especially true for industries that are not included in the general ROAS calculation. This requires businesses to share the amount they spend on Google Ads and how much they make with their ads.

While you won’t find an industry average ROAS with Google Ads, you can still use data from Google Ads such as ad spend and return on investment (ROI) to establish a benchmark for your company.

Hint – The benchmark is 200%. This is a 2 to 2 ROAS, or an average return on investment of $2 per $1. Continue reading to learn more about the ROAS benchmark for Google Ads.

How to calculate ROAS and what to watch out for when calculating ROAS for Google Ads.

How much do you get back from advertising?

Calculating your ROAS with Google Ads

No matter how you calculate ROAS using Google Ads, whether you use a calculator or pen and paper, understanding ROAS will help you to understand the ROAS formula: 

ROAS = Total Ad Revenue/Total Ad Spend

In some cases, you may see the ROAS formula in this:

ROAS = Total Ad Revenue * 100

This formula converts your ROAS into a percentage by multiplying it by 100. It shows that a positive percentage like 50% does not equal positive ROAS. Your business will not earn half its investment back if you have a ROAS higher than 100%.

What’s the average ROAS for Google Ads?

Google Ads average ROAS of 200%. This means you’ll earn $2 for every $1 spent on Google Ads.

• What does an average company spend on Google Ads?
• Google Ads – What can a company get from it?

The average business spends $9000 to $10,000 per month on Google Ads. The average business spends between $9000 and $10,000 per month on Google Ads.

ROAS = Total Ad Revenue * 100

ROAS = $18,000/9000 *100

ROAS = 2 *100

ROAD = 200%

The result was 200%. Google Ads will pay $2 per $1 you invest.

What’s the average Google Ads ROAS for my industry?

It’s difficult to calculate the average ROAS of Google Ads for each industry due to a few factors. Companies are often uncomfortable sharing information about their ad spend or ad revenue.

A large and diverse sample is necessary to get accurate ROAS industry benchmarks. This means you will need a large and varied sample to get accurate ROAS industry benchmarks.

Refer to the ROAS average Google Ads: 20%.

What’s a good ROAS for Google Ads?

It’s great that you meet the ROAS of Google Ads. But, it’s even more important to make your business more money through paid advertising. This will probably lead to some high-fives.

Higher ROAS can result in a higher Google Ads budget, which can allow you to get more results for your company. Returns greater than 400% or a ratio of 4:1.

In some cases, businesses may have higher goals than 400%. This allows you to place ads in places like Google search results.

What you need to know about the ROAS calculation for Google Ads

ROAS calculators can be very useful for finding ROAS. However, you should remember these things:

1. ROAS should cover all advertising expenses

To calculate your ROAS, you must enter the total advertising spend. The company then enters its monthly advertising budget, which they pay directly to an ad network such as Google Ads.

These expenses could include, for instance:

• Bid management Tools
• Landing page design services
• Salary for employees

These numbers can be included or excluded depending on your company’s role. Your bid management software should be used for your advertising campaigns only.

2. ROAS does NOT include advertising revenue.

ROAS can be used to determine how much revenue you have earned from advertising such as Google Ads. ROAS may not give you a true picture of your Google Ads ROAS, especially for lead-based businesses.

Google Ads allows you to create custom conversions. For example, a quote request. You can also give them a monetary amount like $250.

3. ROAS is not ROI

While they may look similar, the ROAS (Return On Investment) and the ROI (Return On Assets) are quite different.

• ROAS refers to the average return on advertising investment.
• The ROI measures your advertising’s total return.

ROAS can help you focus on the campaigns that have the highest return for your business (e.g. Google Ads ).

If you are unhappy with your results, or your overall Google Ads strategy, please contact our team.