Here’s the problem… The default Return on Investment (ROI) displayed by Google Analytics is misleading for two reasons.
Issue 1: Google Analytics combines revenue form your transactions and goals. That can lead to double counting, if for example, an add-to-cart click is a monetised goal.
Issue 2: Google Analytics has no idea about what profit margins you operate under – how can it? Google therefore has to assume that *ALL* revenue generated by your visitors is 100% profit.
In this post I show you how to avoid these issues and calculate your AdWords REAL ROI. Its purpose is to take you to the next level – allowing you to move beyond adjusting bids simply based on conversions. Instead, you can go after the ”highest” value converters.
Figure 2 - How big a difference is the default ROI versus the REAL ROI?
As you can see in Figure 2, we are not tweaking the edges here!