Publication

Google Ads campaigns: worth it or not?

Objective and proposed method

The goal of this page is to help you determine whether it is in your interest to run SEA campaigns, in particular Google Ads.
All you need to do is enter your estimated figures in the first 9 fields (underlined) below. They are pre-filled by default with values you can replace.
The other calculated fields will deliver very useful results to help you determine the profitability of your future campaigns.

Field breakdown

There are 3 types of fields:

• In blue: the campaign parameters and your e-commerce baseline
  • Ad budget = the budget you plan to allocate to your ads. Don’t limit yourself to a very low budget out of principle or caution. Play with the numbers and see what the final profitability looks like. You can always cap budgets in real time within Google Ads itself.
  • CPC = Cost Per Click. Enter here the average amount you expect to spend per click on your ads. If you have no idea, note that it is generally currently between €0.30 and €0.80, but this depends entirely on industry sectors. Nothing beats real-time testing, but in the meantime you can ask other e-merchants or use Google Ads itself to run simulations.
  • Conversion rate (in %). Enter here, as a first step, the average conversion rate of your e-commerce (the average being close to 1%). It is likely that, if your campaigns are well configured, the actual rate from your campaigns will be better than the average rate across all your e-commerce conversion channels.
  • Average basket: Same principle as the conversion rate — enter the average basket for your e-commerce, noting that the figure achieved through Google Ads is generally a little higher.
    
    
• In red: the e-commerce baseline and campaign parameters
  • Average shipping cost: the average shipping fee for an order.
  • Google Ads account management cost: the fee charged by your agency or freelance Google Ads manager, if applicable. If you don’t know it, note that it is generally 15% of the campaign spend with a minimum of €300–500 per month. Of course, enter 0 here if you manage everything yourself — though that is absolutely not what I recommend: it’s a profession.
    
    
• In green: the parameters
  • Repurchase rate. A percentage of your Google Ads buyers will tend to come back directly to your site without clicking on an ad again, because they have already identified you. It is up to you to estimate what percentage of people return to buy this way, which increases the profitability of your campaigns.
  • Word of mouth. Just as with repurchasing, a portion of the sales you make through Google Ads will generate additional direct sales through word of mouth (your site name spreads).
  • Gross product margin. Finally, enter here your average gross product margin, which is a function of the average ratio between purchase price and selling price. This article explains it in detail. When calculating it, bear in mind that you will need to make attractive offers in some of your ads, which will impact your margin.

Your turn

Fill in the first 9 fields (« Your data ») — the others are calculated automatically.

Your data Ad budget* CPC* Conversion rate (in %)* Average basket* Google Ads account management cost* Average shipping cost* Repurchase rate* Word of mouth* Gross product margin (in %)*

Results

Number of orders Revenue Order margin Final margin Shipping costs Total cost The final margin is probably the most important result: it takes all the preceding elements and calculations into account to determine whether you are making money or not.

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