Return on Investment (ROI) - AdWords Help Center

Return on Investment (ROI) - AdWords Help Center: "Return on Investment (ROI)
Return on investment (known as ROI) is the ratio of the cost of advertising relative to the profit generated from conversions such as sales or leads. Your ROI indicates the value to your business gained in return for the cost of your ad campaign. Watch the 'Intro to ROI' video to learn about ROI and why it's important to your AdWords account.
Although exact measurement is nearly impossible, you can help assess the ROI of your campaign by using these calculations: take your revenue from sales, subtract your advertising costs, then divide by your total advertising costs.

(Revenue - Cost) / Cost

For example, say you want to drive users to your website in order to generate sales for your gadgets, which results in a profit of $10 per gadget sold. You invest $1000 in your ad campaign for the past week, and as a result, you sold 130 gadgets. Your revenue from sales or total profit is $1300 ($10 profit multiplied by 130 units). Thus, you subtract the $1000 cost of your ad campaign from your $1300 profit to receive $300. The $300 amount is profit returning to you as a result of your initial $1000 advertising investment. Your ROI, expressed as a percentage of your initial investment, would be 30% (300/1000, multiplied by 100).

Use our free Conversion Tracking tools to help track your ROI.
Learn how to increase your conversions and improve ROI.
Learn how to bid strategically to maximize your ROI."