Module 6 - Know your profit

How do you tell whether a campaign is actually in profit?

Take your total spend, divide it by the number of sales, and compare the result to what the product costs you to deliver. That gives you your cost per customer, and as long as that figure is less than the cost to fulfil the product, you are in profit.

There is a way for Google to do that calculation on your account, which I will show you in a second. The wider equation is just as simple. Total revenue, which you can get from your CRM system or from Stripe or wherever you keep it, against your total expenses, including your advertising cost, your cost to fulfil, so staff, and then the cost of the actual product.

If you are in the digital space and you are selling a course or a coaching programme, you do not need to worry about the cost per product. It is probably just going to be the amount you have made take away your advertising cost, and then you are good.

What does a profitable campaign look like in the account?

A campaign selling a three to four hundred pound product at a cost per sale of £20.22 is more than profitable. Going into one of our accounts and changing the date range, you can see the sales completion figure, which is how many people this specific campaign has sold to, and you can see how much it has spent.

The equation you can run at the top is cost per sale. On this account the average cost per sale is £20.22, and this one up here is at £74. This is for a product of about three to four hundred pounds, so these ads are more than profitable.

How do you set up the cost per sale column in Google Ads?

Build it as a custom column that divides the cost metric by the sales completion metric. Go to Columns at the top, then either click Modify columns, or, if you have already got a column set, click the pencil.

Click on custom columns and you will see cost of sale. That is the one we want. Take cost, which is just a metric for Google, and divide it by sales completion. It really is just cost divided by sale. To add the metric you click the plus, then choose what you want to divide it by. If a metric is already in there it will not show again.

Once you have got that in, click save, then click the little tick to add it to your columns, and click save and apply. Mine is already there so I do not need to, so I will click cancel.

You can then see very quickly that some of these are about £20 for a cost per sale, and £74 for a cost per sale. As long as the cost to deliver the product is less than that, these campaigns are good, and these are the ones I would look at increasing the budget on or improving.

Knowing your profit is one of the most important things. If you have any questions on how to set this up on Google, please let me know.