How to do ROI Analysis in Google Analytics

You can do ROI analysis in Google Analytics by using the ROI Analysis’ and ‘Cost Analysis’ reports. Through these reports, you can calculate the ROAS of various marketing campaigns under different attribution models.

In Google Analytics, the ROI analysis is done via ROAS (i.e. Return on Advertising Spend). So while the name of the GA report is ‘ROI Analysis’ report, it is actually computing and reporting on ROAS.

How ROAS is calculated in Google Analytics

Google Analytics calculates ROAS as:

Conversion Value / Channel Spend

Here, the conversion value is the ecommerce revenue and/or goal value.

For example, let us suppose: Your ad spend for Google Adwords in the last one month was $100 and your ecommerce sales from Google Adwords in the last one month was $1000

Now Google Analytics will calculate ROAS for Google Adwords as: $1000 / $100 = 1000%

You should consider investing more in those marketing channels/campaigns which have higher ROAS.

Note: Google Analytics can calculate ROAS retroactively for your marketing campaigns.

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The Cost Analysis report

Through the ‘Cost Analysis’ report, you can determine the ‘Cost Per Click’ and ‘ROAS’ of all those marketing channels for which you imported the cost data in Google Analytics.

What that means you can determine the ROAS for marketing campaigns like:

  • Bing ads
  • Facebook ad campaigns
  • Affiliate campaigns
  • Display campaigns
  • Email campaigns etc.

In order to view the ‘Cost Analysis’ report, navigate to Acquisition > Campaigns > Cost Analysis in your GA view:

If you have imported cost data in Google Analytics then you will see the cost and ROAS data in this report, like the one below:

cost-analysis2

If you have not imported cost data in Google Analytics then your report will look like the one below:

The downside of the ‘cost analysis’ report is that all of the ‘ROAS’ data is calculated using only one attribution model called‘ Last Non-Direct Click’. So if you want to do ROI Analysis under different attribution models (esp. Data Driven Attribution model) then you would need to use the ‘ROI Analysis’ report.

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The ROI Analysis report

Through this report, you can determine ‘Cost Per Acquisition’ (CPA) and ‘Return on Advertising Spend’ (ROAS) for each marketing channel under different attribution models.

So instead of just the regular CPA, you can determine:

  1. Last Interaction CPA
  2. Last non-direct click CPA
  3. Last Adwords click CPA
  4. First Interaction CPA
  5. Linear CPA
  6. Time Decay CPA
  7. Position Based CPA
  8. Data Driven CPA
  9. or CPA based on any custom attribution model

data-driven-roas

Similarly, instead of just the regular ROAS, you can determine:

  1. Last Interaction ROAS
  2. Last non-direct click ROAS
  3. Last Adwords click ROAS
  4. First Interaction ROAS
  5. Linear ROAS
  6. Time Decay ROAS
  7. Position Based ROAS
  8. Data Driven ROAS
  9. or ROAS based on any custom attribution model

To access the ‘ROI Analysis’ report, navigate to Conversions > Attribution > ROI Analysis in your GA premium view:

If you have got cost data then only you will see data in this report like the one below:

roi-analysis-report2

 

Note: The default attribution model for the ‘ROI Analysis’ report is ‘Data Driven Attribution Model’ (provide this model is available to you) and ROI analysis report is available only in Google Analytics 360/premium enabled property. 

In the context of attribution modelling in Google Analytics, we do not measure the generic conversions generated by a particular marketing channel. What we actually measure is the conversions generated by a particular marketing channel under a particular attribution model (like ‘Last click conversions’, ‘Data driven conversions’ etc for say ‘paid search’).

Similarly, in the context of attribution modelling in GA, we do not measure the generic ROAS for a particular marketing channel. What we actually measure is the ROAS for a particular marketing channel under a particular attribution model (like ‘Last click ROAS’, ‘Data driven ROAS’ etc say for ‘paid search’).

 

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Requirements for doing ROI Analysis in Google Analytics

There are four main requirements for correctly doing ROI analysis in Google Analytics:

  1. Ecommerce tracking setup
  2. Goal Conversion tracking setup
  3. Availability of cost data in your GA reports. The cost data is simply the cost of running your marketing campaigns.
  4. At least 60 days of historical data in Google Analytics (in order to make the data statistically significant). This data include: ecommerce data, goal conversion data, cost data and website usage data.

Unless you do not meet all of these requirements, your ROI analysis is most likely to be inaccurate.

However without ‘cost data’, GA won’t be able to calculate ROAS. So importing cost data into GA is critical. To get the cost data in your GA reports you need to carry out following two tasks:

Task-1: Link your Google Analytics account to your Google Adwords account. Once the two accounts are linked, Google Analytics will automatically start getting cost data (‘campaign cost’, ‘cost per click’, ‘return on advertising spend’ etc) from Adwords.

Task-2: Import cost data from all non-Google paid marketing campaigns via Google Analytics ‘Data Import’ feature (available under ‘Admin‘ > ‘Property‘ > ‘Data Import‘). You can also use GA management API to automate this process.

 

I generally upload one month of cost data for non-Google paid marketing campaigns in the first week of every month.

If you are using some third party tool to automate the cost data import process then you can import cost data every week or even every single day into GA.

Once you have imported cost data into GA, it will automatically get integrated with your website usage data, goals data and ecommerce data. Thus allowing you to do detailed ROI analysis for your marketing campaigns via ‘Cost Analysis’ and ‘ROI Analysis’ reports.

Google Analytics already provides website usage data (like sessions, bounce rate etc) so you do not need to set it up separately. To get ecommerce data (like revenue) in your GA reports, you would need to set up ecommerce tracking or enhanced ecommerce tracking.

Similarly, to get goal conversions data in your reports, you would need to setup Conversion tracking.

Make sure that each Goal you set up is assigned correct ‘Goal value’.

Otherwise, your ROAS calculations may not be accurate.

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Himanshu Sharma

Digital Marketing Consultant and Founder of Optimizesmart.com

Himanshu helps business owners and marketing professionals in generating more sales and ROI by fixing their website tracking issues, helping them understand their true customers' purchase journey and helping them determine the most effective marketing channels for investment.

He has over 12 years of experience in digital analytics and digital marketing.

He was nominated for the Digital Analytics Association's Awards for Excellence. The Digital Analytics Association is a world-renowned not-for-profit association that helps organisations overcome the challenges of data acquisition and application.

He is the author of four best-selling books on analytics and conversion optimization:

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