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proving ROI of paid media advertising

Updated: Jun 10


Marketers spend a good chunk of their time thinking about ROI. Was your recent campaign successful? Do you know the value behind your paid media? Which social media channel is your most effective? Proving the ROI of your paid media activity is fundamental to determining which campaigns are performing well, and which aren’t. Given how many outcomes can come from an ad campaign, determining the ROI of your paid media ad isn’t always simple, but it’s worth it.

Paid media advertising has many formats, whether it’s search, social or display. Over the years, it has become a crucial part of digital marketing strategies with paid search commanding, on average, 39 percent of marketers total advertising budget. To truly understand how much of your business’s revenue you can attribute to your paid media efforts, you need to know which tools, channels and strategies are most cost-effective and high performing.

why is ROI so important to your paid media advertising?

ROI is an important part of performance marketing. It can tell you whether you’re getting your money’s worth from your marketing campaigns and if you’re not, how to improve them. All too often, marketing falls victim to assumptions, with teams not truly understanding how many leads they’ve generated or how many people they’ve reached. But performance should report on the investment made and the revenue achieved.

Reporting upon marketing from an ROI perspective allows you to communicate clearly with your stakeholders and wider business. If marketing output is profitable, it is likely to be judged as successful, giving marketers greater opportunity for investment. But proving ROI is easier said than done.

For example, let’s say your business invests spend into display ads across social media channels, created to drive traffic to your website. After being served this ad while browsing Instagram, the user may navigate to the search engine to find your website and convert. But do you assign the credit for this conversion? Does it all go to organic search traffic because that’s where the user last clicked? Or is the credit split across your social media channel and display ad? Consumers often take long and complicated routes to conversion, and this is where attribution can help.

Proving your ROI through attribution can connect the dots, showing you which part is working effectively so your budget can be redirected to the most valuable channels.

By considering attribution and following our top tips, proving ROI can be made a whole lot easier, allowing you to report on the effectiveness of your paid media advertising.

how to prove ROI of your paid media advertising

define your goals

Understanding exactly what your business objectives are and how your conversions fit into this is the place to start. Are you aiming to build brand awareness? Are you trying to drive conversions? Do you want users to download a specific guide? For each objective, consider your KPIs for measuring success. Taking the example of running a paid ad on Instagram, your objectives may look something like this:



Your goals directly impact how you track your conversions. Whatever they may be, tracking must be set up correctly to ensure insights are as accurate as possible.

set up google analytics properly

The easiest way to gain an understanding of your ROI is to set up Google Analytics (GA) which can calculate ROI through conversion tracking. If you don’t, you’re missing out on a significant opportunity to gather important data.

  • Setup Goals: The most important step to take first is creating goals for your conversion points or KPIs. These can be very simple such as creating a goal for every transaction including revenue (eCommerce) or view of a key page to track form submissions (a thank you page). Or, they can more be complex with event parameters for tracking key actions such as a button click to download a pdf.

  • UTM parameters: Then, ensure GA is able to pick up relevant information from your paid channels using UTM parameters. This allows GA to differentiate your ads from one another, setting them apart from organic social activity. Using UTM tags, you can gather more data for GA to use based on exactly how you get the traffic, why it’s coming to you and where it’s coming from. For most advertising platforms, like Google Ads, auto-tagging should be enabled to prevent the need for UTM parameters.

  • Upload your cost data: Uploading your cost data to the Data Import tool helps GA determine ROI of the paid ad.

Many conversions from AdWords occur through phone calls so it’s important to track these too. When someone wants to book a consultation or they want to enquire further about a service, they often call direct. We have access to platforms and tools that give us call intelligence allowing us to provide accurate call tracking, dashboarding and more to help you monitor these conversions.

how to track social campaigns easily

Social media platforms have massively evolved, giving businesses the ability to create campaigns to fit most objectives. However, determining how likes, shares, comments and clicks translate into converting customers is hard.

Similar to paid search campaigns, it’s important to set up accurate tracking for your paid social campaigns. Facebook Ads Manager offers their Pixels tracking code while LinkedIn allows you to track ads using their Insight Tag. These analytical tools allow you to measure the effectiveness of your advertising by understanding the actions people take on your website. This can be done by:

  • Ensuring your ads are shown to the right people: Find new customers or re-engage those who have already visited a specific page or taken a desired action on your website.


  • Boost sales: Reach people who are more likely to convert with your brand by using automated bidding.

  • Measure results: Understand the performance and effectiveness of your ads by measuring what happens when a user sees them.

Social analytical tools do use aggressive attribution models to claim as many conversions as possible. Some advertisers may prefer to setup UTM parameters as well so Google Analytics can identify social campaigns and report on click conversions.

how to improve your ROI


Once you have prepared yourself for proving ROI on your paid media ads, it’s important to get as much as possible from the data. This needs to be used to inform your next steps and optimise your campaigns for improvements. Whether it’s reconsidering your platform choice or reducing your cost-per-click (CPC), these tips can help you get started:


continuously review and optimise


When you begin optimising your campaigns, it’s important to regularly check performance for a change in ROI. Monthly reporting is ideal and, if you’ve taken the necessary steps to setting up your goals in GA, this should be easy to do.


get your paid social media channel right

Considering the ROI of each social platform is important to ensure you’re using the optimum channels for your business objectives. For example, Facebook and Instagram are great for B2C businesses whereas LinkedIn is better suited for a B2B business aiming to reach partners and prospects. Additionally, Facebook and Instagram may be more successful for direct conversions thanks to their shopping capabilities, while Twitter could help with boosting brand awareness..


test your landing pages and ad copy


A/B test different variants of your ad to see what works best for your campaign, audience and platform. Tweak your headings, CTAs, ad copy and landing pages to understand what delivers the highest ROI. CRO can help unlock onsite potential to further increase ad performance. By A/B testing options, insight can be uncovered that can be fed back into your optimisation strategy.

refine your targeting


Did you know, 67 percent of businesses create buyer personas to help them target their ideal customers? A vast majority of marketers also invest in getting to know their target audience. Using personas helps you get the most out of your paid media ads, speaking to your audience in a relevant and engaging way.


use the conversion triangle


Using the conversion triangle can identify terms that hit target CPAs by reviewing historical average CPCs and basing this off the current conversion rate of the site. This simple formula can also help identify keyword groups with cost-effective, average CPCs to unlock potential for account and brand growth.


use smart bidding functionalities

Once you know your objectives and CPA, Smart Bidding can be used to help strengthen ROI. Smart Bidding is a form of automated bidding that uses machine learning to optimise for conversions in every auction, a feature known as auction-time bidding.


When focusing on return, leveraging machine learning is fundamental to ensure the most appropriate bid is set at auction level. Machine learning can help you make more accurate predictions across your account for the best ROI. For example, sometimes, paying a higher CPC leads to a higher conversion rate which ultimately provides a stronger return. Smart Bidding also offers transparency in terms of reporting, providing deeper insight into your bidding performance to truly understand the value.


The data-driven experts behind equation know a thing or two about ROI: how to prove it and how to improve it. Contact the team if you want to know more.

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