What does ROI tell you?

Prepare for the Google Ads Search Certification Exam. Engage with multiple choice questions and in-depth explanations to bolster your understanding. Ace your test!

Multiple Choice

What does ROI tell you?

Explanation:
ROI measures profitability by showing how much return you get from the money you spend on ads. It compares revenue generated from the ads to the cost of the ads, usually using (Revenue − Cost) ÷ Cost. For example, spending $1,000 and generating $3,000 in revenue yields a profit of $2,000, so ROI is $2,000/$1,000 = 2.0 (200%). This metric helps you judge whether your ad spending is worth it and compare different campaigns. It’s not about total conversions, cost per click, or click-through rate—those show volume or efficiency of clicks, not the financial return. Note that many marketers also track ROAS (revenue per dollar spent), which is closely related but focuses on revenue rather than profit after all costs.

ROI measures profitability by showing how much return you get from the money you spend on ads. It compares revenue generated from the ads to the cost of the ads, usually using (Revenue − Cost) ÷ Cost. For example, spending $1,000 and generating $3,000 in revenue yields a profit of $2,000, so ROI is $2,000/$1,000 = 2.0 (200%). This metric helps you judge whether your ad spending is worth it and compare different campaigns. It’s not about total conversions, cost per click, or click-through rate—those show volume or efficiency of clicks, not the financial return. Note that many marketers also track ROAS (revenue per dollar spent), which is closely related but focuses on revenue rather than profit after all costs.

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