You want to generate leads with your Google ads campaign by encouraging people to fill out an interest form on your website. What do you need to know to measure return on investment (ROI) for this campaign?
Correct Answer
How much you’ve spent on the campaign compared to the value of leads generated
Why is this the correct answer?
To measure ROI for a lead generation campaign, you need to know how much you have spent on the campaign compared to the value of leads generated. ROI is calculated as (revenue or value generated minus cost) divided by cost. For a lead generation campaign, this means assigning a monetary value to each completed form submission — based on average lead-to-customer conversion rate and average customer value — then comparing total lead value against total ad spend. Without knowing the value each lead represents, it is impossible to calculate true ROI.
Why are the other options wrong?
You can’t calculate return on investment for campaigns that are focused on online leads
ROI can absolutely be calculated for lead generation campaigns — you assign a value to each lead based on expected revenue and compare it to ad spend.
The percentage of budget spent compared to how many forms were completed
The percentage of budget spent versus forms completed describes a cost-per-lead metric, not ROI. ROI requires knowing the monetary value of those leads, not just the count.
The number of clicks your ad received divided by the number of times it showed
Clicks divided by impressions is the formula for CTR — an engagement metric, not ROI. It measures ad performance, not the financial return on investment.
Real-world example
A mortgage broker spends £2,000/month on Google Ads and generates 80 enquiry form submissions. Each qualified lead has a 10% close rate and an average commission of £1,500. Lead value = 80 x 10% x £1,500 = £12,000. ROI = (£12,000 - £2,000) / £2,000 = 500% — a clear positive return on investment.
Official documentation: https://support.google.com/google-ads/answer/2472725
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About the Google AdWords Fundamentals Exam (Retired)
The AdWords Fundamentals exam was retired when AdWords became Google Ads.
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