Calculating Google Ads ROI requires connecting your ad spend to the revenue it generates, not just to the clicks or enquiries it produces. For accounting firms, where the value of a new client extends over multiple years, a straightforward monthly ROI calculation underestimates the true return. This guide shows you how to calculate ROI correctly, what benchmarks to use, and when to conclude the channel is or is not working.
The basic ROI formula
ROI = (Revenue from Google Ads minus Cost of Google Ads) / Cost of Google Ads × 100
If you spend £500 per month on Google Ads and generate £1,500 in new annual fees from those clients, your ROI is:
(£1,500 minus £500) / £500 × 100 = 200% ROI over the first year
But the fee recurs for as long as the client stays. If the average client retention is four years, the lifetime revenue is £6,000, and the ROI calculation becomes:
(£6,000 minus £500) / £500 × 100 = 1,100% lifetime ROI
The first-year ROI and lifetime ROI tell different stories. Use first-year ROI for quick viability decisions; use lifetime ROI for long-term channel investment decisions.
The numbers you need to track
- Total Google Ads spend per month — available in your Google Ads account under Billing.
- Number of enquiries from Google Ads per month — tracked via conversion actions (form submissions, phone calls) in Google Ads.
- Close rate: enquiries to signed clients — how many enquiries become paying clients? Track this in your CRM or a simple spreadsheet. If you had 10 enquiries last month and signed two, your close rate is 20%.
- Average first-year fee per new client — the average annual recurring fee from clients acquired through Google Ads. This may differ from your firm average if Google Ads attracts a specific type of client.
- Average client retention (years) — how long, on average, does a client stay with your firm? Accounting firms typically retain clients for three to seven years.
A worked example
| Metric | Value |
|---|---|
| Monthly Google Ads spend | £400 |
| Monthly enquiries from ads | 8 |
| Close rate | 25% |
| New clients per month | 2 |
| Average first-year fee | £1,200 |
| Monthly revenue from new clients | £2,400 |
| First-year ROI | 500% |
| Average retention | 4 years |
| Lifetime value per client | £4,800 |
| Lifetime revenue (2 clients × £4,800) | £9,600 |
| Lifetime ROI | 2,300% |
Even a conservative model with a modest close rate shows strong returns when client lifetime value is factored in.
Cost per enquiry and cost per client
Two simpler metrics are more actionable for day-to-day management:
Cost per enquiry = Monthly spend / Number of enquiries
If you spend £400 and generate 8 enquiries: £400 / 8 = £50 per enquiry.
Cost per new client = Monthly spend / Number of new clients signed
If you spend £400 and sign 2 new clients: £400 / 2 = £200 per new client.
A cost per new client of £200 against a first-year fee of £1,200 is a 6:1 return, well within a sensible acquisition cost threshold.
What counts as a Google Ads conversion
Attribution is the tricky part. Not every new client will say "I found you on Google Ads" — many will just say "I found you online" or not mention it at all.
Three approaches to attribution:
- Last-click attribution: credit Google Ads if the enquiry came through a form submission or call tracked in Google Ads. This is automatic with conversion tracking and understates Google Ads' contribution when clients research you via multiple touchpoints before enquiring.
- First-touch attribution: credit the first source of contact. If a prospect first found you through a Google Ad three months ago, then called directly, the ad gets credit.
- Ask at intake: include "How did you hear about us?" in your onboarding form or initial call. This produces self-reported attribution, which is directionally useful even if imprecise.
Most accounting firms use a combination: Google Ads conversion tracking for mechanical attribution, plus asking at intake for qualitative confirmation.
When Google Ads is not producing ROI
If your cost per new client consistently exceeds the first-year fee, the channel is not profitable on a first-year basis. Investigate:
- Cost per enquiry too high: keywords are too expensive or match types are too broad, attracting irrelevant clicks.
- Close rate too low: enquiry quality is poor (wrong audience) or your follow-up process is not converting.
- Average fee too low: the clients Google Ads attracts are lower-value than your practice average.
- Tracking undercount: phone enquiries that are not tracked make the cost per enquiry look worse than it is.
Fixing conversion tracking and improving close rate are usually higher leverage than simply reducing spend.
Key takeaways
- First-year ROI understates the true return for accounting firms — calculate lifetime ROI using average client retention to make long-term investment decisions.
- The two most useful day-to-day metrics are cost per enquiry and cost per new client.
- Track conversions in Google Ads, close rate in your CRM, and average fee in your accounts — connecting these three data points gives you the full ROI picture.
- Ask new clients how they heard about you to supplement Google Ads conversion tracking with direct attribution.
- If cost per new client consistently exceeds the first-year fee, investigate tracking accuracy and enquiry quality before reducing budget.
Frequently asked questions
What is a good cost per new client for Google Ads?
A cost per new client below 30% of the first-year fee is generally considered strong for professional services. For a firm with a £1,200 average annual fee, a cost per client below £360 is a healthy acquisition cost. These are rough benchmarks — your acceptable threshold depends on your margins and client lifetime value.
Should we include agency management fees in the ROI calculation?
Yes. If you use an agency to manage your Google Ads, their fee is part of your total Google Ads cost. A campaign spending £400/month with a £300/month agency fee has an effective spend of £700/month. Factor in all costs for an accurate ROI picture.
How do we attribute new clients who came from multiple touchpoints?
Multi-touch attribution gives partial credit to each touchpoint (first Google Ad, website visit, newsletter, referral mention). For most small accounting firms, the precision of multi-touch attribution is not worth the implementation complexity. Last-click tracking plus asking at intake gives a practical approximation.
How long before we can draw meaningful ROI conclusions?
Three to four months of properly tracked campaign data is the minimum for meaningful ROI analysis. Single-month snapshots are distorted by seasonal variation, campaign learning phases, and small sample sizes. Review rolling three-month periods for more reliable conclusions.
Can we calculate ROI before launching a campaign?
Yes, as a projection. Use your existing close rate, average fee, and an estimated cost per enquiry from Keyword Planner data to project whether a Google Ads campaign can achieve positive ROI. This is a planning input, not a guarantee, but it establishes whether the economics make sense before spending.