Marketer, analyst, ex-CMO focused on the Google ecosystem (Ads, Merchant Center, GA4, GTM). Google Partner. 150+ projects, 100+ positive reviews on Freelancehunt, 12+ countries.
- I work directly, with no account managers or subcontractors
- I measure results in sales, not in-platform conversions
- Maximum expertise in the Google ecosystem — instead of “PPC, social ads and SEO, all in one”
A lot of businesses get into Google Ads on the principle of “let's launch and see what happens.” The ads run, the budget gets spent, some leads come in, but the key question stays unanswered: does running ads make financial sense at all?
Contents
- Why calculate anything before launching ads
- Where to get the numbers: history or Keyword Planner
- Why I don't use a 5–10% conversion rate in the calculations
- The structure of the calculation: what goes into the table
- How budget affects return on marketing investment
- When launching Google Ads makes no economic sense
- ROMI or ROI: what exactly this model calculates
- Why a Google Ads forecast is not a guarantee of results
- Conclusion: why you need this table before launching Google Ads
- FAQ
Will Your Google Ads Launch Be Profitable? A Feasibility Calculation Example
Personally, I start every new project with a simple financial calculation. Before launch, it shows whether there's a chance to at least break even on the marketing investment, or whether this launch is doomed to “eat” the owner's money.
In this article I'll walk through the logic of that calculation using an e-commerce project as an example: what input data the forecast needs, why I always calculate three scenarios instead of one, how the sales, margin and payback forecast comes together, and in which cases I honestly advise against running ads.
This is a real working approach I use to assess whether Google Ads makes sense for my prospective clients.
Why calculate anything before launching ads
The goal is simple: to understand whether a Google Ads investment will pay off with realistic numbers, not in some “ideal world.”
I never calculate just one scenario. Instead, I always build three:
- Pessimistic — everything goes worse than you'd like.
- Average (realistic) — a normal working scenario.
- Optimistic — the market and the business help out, but no fairy tales.
The logic is the same in all three scenarios: we take the budget and the projected cost per click, calculate the projected number of clicks, use the website conversion rate to get the number of orders, use average order value and margin to get gross profit, subtract the ad budget and the specialist's fee, and see what happens to the marketing investment.
What you get at the end isn't a “gut feeling” but concrete numbers: where it's a loss, where it's break-even, and where there's room for profit.
Where to get the numbers: history or Keyword Planner
The ideal case is when the business already has history: ads have been running, and there's analytics data for a year or two. Then the forecast is built on real numbers, not on feelings.
If there's historical data: we take the actual cost per click from the ad account, look at the real website conversion rate, take the average order value, and derive margin in % from the markup or the financial model. The better this data, the more accurate the forecast.
If there's no history (a new project): in Google Ads Keyword Planner we check the estimated cost per click for the relevant keywords and take the upper end of the range, so we don't paint too rosy a picture. The budget is the amount the owner is willing to put into ads every month. Website conversion rate goes in as scenarios: 1%, 2% and 3%. Average order value and margin should come from the real business whenever possible, not be pulled out of thin air.
If the client can't tell me either the average order value or the margin, that's a red flag. Without these numbers, a decent forecast is impossible.
Why I don't use a 5–10% conversion rate in the calculations
Yes, in some niches the website conversion rate can be 5–7% or even higher. I've had projects like that: a strong brand, a loyal audience, a narrow niche, reasonable prices.
But if I put numbers like that into the baseline forecast for a new online store, I'd be setting false expectations. So for generic e-commerce I use:
- 1% — the pessimistic scenario (something is off with the website, the price or the niche).
- 2% — the realistic working scenario.
- 3% — the optimistic scenario, but still not science fiction.
Anything higher usually requires either a very recognizable brand, aggressive price-cutting, or serious systematic audience work. You shouldn't count on that at the start of a new project.
The structure of the calculation: what goes into the table
In reality, all the magic is a simple Google Sheets or Excel table with a few variables and a few formulas. Roughly, it consists of three blocks.
1. Inputs: monthly ad budget, projected or actual cost per click, website conversion rate (1/2/3%), average order value, product margin in %, cost of a specialist or agency.
2. Calculated metrics: clicks = budget / cost per click; orders = clicks × conversion rate; revenue = orders × average order value; gross profit = revenue × margin; marketing costs = budget + specialist's fee.
Return on marketing investment (ROMI) = (gross profit − marketing costs) / marketing costs.
3. Three scenarios in one table. It's convenient to have three columns: pessimistic, realistic and optimistic. That way you immediately see how the results change with different conversion rates and assumptions.
How budget affects return on marketing investment
On real projects, it often turns out that with a small budget the ads show a negative ROMI, while with a bigger budget — under the same conditions — the channel breaks even or goes slightly positive.
The reason is simple: with micro-budgets, the specialist's fee makes up a very large share of total marketing costs. As the budget grows: the fee's share of marketing costs drops; gross profit grows thanks to more sales; ROMI gradually “climbs” out of the red to zero and above.
In the example from the video, even when the budget goes up from 30,000 to 45,000 UAH ($667–1,000) and beyond, under certain conditions the business can still be “in the red” on ROMI. But at a budget of around 68,000 UAH ($1,511), even the worst-case scenario at least breaks even in terms of marketing investment.
An important point: this doesn't mean the business as a whole has broken even or turned a profit — it means the Google Ads channel is no longer a pure “loss project” in terms of marketing costs.
When launching Google Ads makes no economic sense
There are cases where, after an honest calculation, I say it straight: “with these numbers, Google Ads isn't worth it for you right now.”
These are usually situations where several factors combine: a very low average order value; low product margins; a high cost per click in the niche; no upselling (the sales team doesn't sell, it's just “cart — checkout”).
In this situation you can play with the scenarios as much as you like, but you'll get a picture where the pessimistic scenario is a hard loss, the realistic one is a loss or roughly break-even, and the optimistic one is a weak result with high risks.
In this case it's more honest either not to run ads at all, or to change the pricing, the product, the margin or the sales model.
ROMI or ROI: what exactly this model calculates
In this model I calculate return on marketing investment (ROMI), not full business ROI.
ROMI answers a simple question: how much did we earn from the Google Ads channel, and how much did we spend to run it?
Three main components go into the calculation: the ad budget; the cost of the specialist / agency; gross profit from sales that came from ads.
Full business ROI also includes rent, salaries, taxes, logistics, software and other operating costs. That's a separate level of analysis. Here our task is to understand whether it makes sense to invest in Google Ads at all with these inputs, or whether it's better not to touch that money.
Why a Google Ads forecast is not a guarantee of results
One important thing needs to be said separately: any calculation is a forecast, not a promise of results.
We live with constant uncertainty: demand shifts, competitors appear, cost per click rises, audience behavior changes, and even the exchange rate moves.
Forecast accuracy depends directly on the quality of the input data: if there's historical ad and analytics data, the model is more accurate; if there's no history, no idea of the average order value and no margin figure, the error will be large and the forecast will show the direction rather than specific numbers.
But even a “rough” forecast like that is better than launching ads on the principle of “let's try and something will happen.”
Conclusion: why you need this table before launching Google Ads
A simple table calculation takes off the rose-tinted glasses before your campaigns even start. You see: at what budget the channel definitely can't pay for itself; where there's a chance to at least break even on marketing investment; how strongly website conversion, average order value and margin affect the result.
Either a specialist or a business owner can put this table together: essentially you need 5–6 variables and a few basic formulas.
If you need a calculation based on your own data, it can be done separately: either hand the numbers over to a specialist, or build your own table using the logic I described above.
How to turn these calculations into a media plan with assumptions and scenarios before launch — in the article “Google Ads Media Planning: How to Build a Realistic Forecast Before Launch”.
Profitability by basket size, LTV and repeat purchases on a real store’s data — in the statistical breakdown “Boring Numbers | Episode 1”.
You can calculate profitability for your business with the free Google Ads ROI calculator.
Where to find me
Message me on Telegram or by email — I respond quickly. Telegram channel and YouTube are for those who want to see real cases before reaching out and understand my approach.