13 Mar How to Figure Out Your ROI on Online Ads
Is Your Ad Spend Actually Paying Off?
Tracking ROI on online ads is essential—but the basic math only tells part of the story. If you’re putting money into Meta, Google, or LinkedIn ads and not seeing results, you’re not alone. Success takes more than just throwing cash at ads. Here’s what really matters and how to make your ads work harder for you.
The Basic Formula
The formula for ROI is straightforward:
(Revenue from Ads – Ad Cost) ÷ Ad Cost(Revenue from Ads – Ad Cost) ÷ Ad Cost
Example:
- Spend $1,000 on Google Ads and get $500 in consults → ROI = ($500 – $1,000) ÷ $1,000 = -50% (Ouch).
- Spend $500 and get $1,000 in booked appointments → ROI = ($1,000 – $500) ÷ $500 = 100% (Nice).
Why It’s Limited:
This formula gives you a snapshot—but it ignores some major factors that impact your bottom line.
Where the Simple ROI Formula Misses the Mark
1. Ads Boost Organic Leads (But You Can’t Prove It)
Someone sees your ad, doesn’t click, but looks you up later and schedules a consult. The ad triggered the action, but since it’s logged as an “organic” lead, it’s not counted in your ROI. More searches and website visits also improve your SEO—value you can’t directly measure but that increases over time.
2. Lifetime Value of a New Client
A $50 ad lands a $200 consult. Great—but what if that client returns for follow-ups or refers others? The basic formula only reflects the first consult, but the real value comes from long-term relationships. Lifetime value (LTV) completely changes the ROI equation.
➡️ Example: A law firm client may pay $500 for an initial consultation, but ongoing services and referrals could generate thousands in additional revenue.
3. Conversion Costs Add Up
Turning leads into consults isn’t free. Retargeting ads, nurture emails, CRMs, and website maintenance all help convert leads—but they add to your costs. The basic ROI formula skips these details, giving you an incomplete picture.
➡️ Example: A healthcare practice might run a follow-up email campaign for no-shows—this increases overall conversions but raises costs.
The Real Deal About Online Ads
Online ads are a long game, not a quick win. It’s not just about getting one consult—it’s about building momentum, growing client relationships, and increasing long-term revenue. Test smart, measure what matters, and adjust based on real results.
Industry Benchmarks (What’s Normal?)
Here’s what service businesses typically see from online ads:
Meta Ads (Facebook/Instagram):
- ROI: ~200% ($2 back per $1 spent)
- Conversion Rate: 8–10%
- Cost-per-Lead: $10–$50
Google Ads (Search):
- ROI: ~200% (up to 400% with tight targeting)
- Conversion Rate: 4–7%
- Cost-per-Lead: $40–$70
LinkedIn Ads:
- ROI: 100–150% (B2B leads grow over time)
- Conversion Rate: 2–5%
- Cost-per-Lead: $60–$100
These numbers give you a realistic target. If you’re not hitting these levels yet, it’s time to adjust your strategy.
Where to Start?
1. Pick ONE Platform and Test Smart
Instead of spreading yourself thin, focus on one platform where your audience hangs out. Start with a few ads at $10–$20 each. Double down on what works and drop what doesn’t.
➡️ Example: If your audience is legal professionals, LinkedIn is likely a better fit. If you’re targeting healthcare consumers, Meta or Google may be more effective.
2. Boost Conversions
Getting clicks is one thing—converting them is another. Retargeting ads and follow-up emails or texts (“Still interested?”) help turn leads into booked appointments. Yes, they cost more—but they also increase your overall ROI.
➡️ Example: A healthcare practice could run retargeting ads focused on benefits of a service to bring people back to schedule.
3. Track What Matters
Use ad dashboards to track performance—but don’t get lost in the weeds. Focus on key numbers like cost-per-lead and consult conversion rate. If a CRM or tracking tool adds value, use it—but keep it simple unless it’s driving better decisions.
➡️ Example: If Google Ads shows a high click-through rate but low conversions, adjust your landing page to reflect the message in your ad.
4. Don’t Ignore the Hidden Wins
Engagement—likes, comments, and time on site—improves your organic SEO and boosts brand awareness. Even if you can’t measure it directly, it helps you grow over time.
➡️ Example: A law firm’s Facebook post about “5 Common Contract Mistakes” may not directly result in a consult but increases trust and brand visibility.
Need Expert Help?
ROI isn’t just about numbers—it’s about strategy. Start small, test smart, and grow from there. If you need help figuring out your ROI or improving your ad performance, we’re here to help.
Schedule a FREE consultation with Life In Motion Marketing today. We’ll help you sharpen your strategy and make your ad dollars work harder for you.
