Google AdWords is a powerful online business tool to market your business to potential customers who are interested in your products or service.

Let’s assume you install laminated floors.

If you use Google™ AdWords, when people search on Google using one of your keywords, like “laminated floors”, your ad will appear next to the list of organic search results.

In other words, your advert will be shown to relevant audiences at the moment when they are most in need of your product or service. It’s not magic, it is just effective advertising.

Google AdWords make the most of your advertising budget because you only pay when your advert is clicked on.

After a person has clicked on your advert, they:
1.    Go to your laminated flooring website
2.    If they interested in your product, they send you an email or phone you
3.    You close the deal

It is that simple. If you effectively advertise on Google AdWords you will receive more business.

The Numbers

You can calculate the amount of money you make by advertising on Google AdWords by using this simple formula:

Your profit = Revenue per sale (Margin) - Cost per sale

Here’s how you calculate your cost per sale:
Cost per sale = Cost per click x website conversion rate x your sales closure rate

A real example:

R416 (Cost per sale) = R5 (per click) x 4% (website conversion rate) x 30% (your sales closure rate)
R584 (Your profit) = R1000 (Revenue per sale) – R416 (Cost per sale)

In this example, you make R1000 for every R416 that you spend.
For every R1 that is spent, a profit of more than R2 is made.