You manage the campaigns for a baby stroller manufacturer that sells its products online and through large retailers. To calculate the total profits from these campaigns, you should:

  • estimate revenue based on the value of an AdWords customer, factor out gross margins, and subtract AdWords costs
  • estimate revenue based on in store sales, factor out gross margins, and subtract AdWords costs
  • estimate revenue based on online sales, factor out gross margins, and subtract AdWords costs
  • estimate revenue based on the value of click, factor out gross margins, and subtract AdWords costs

Formula that calculates total profits from AdWords: First, understand the full value of each AdWords customer. Estimate her total lifetime purchases, for all conversion types (on and off the web) and including any word-of-mouth referrals she may make. Make reasonable assumptions about the value of each factor and total them to estimate revenue. Then factor out gross margins and subtract AdWords cost to get total profit.
Read more here: https://support.google.com/adwords/answer/6167126

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