If you own an e-commerce business, you know that the right marketing channels can make or break your success. While there are many potential channels to choose from, two of the most popular are Google Ads and Instagram Ads roi Analysis. So, which one should you invest in?
Let’s take a brief overview of each channel before comparing its return on investment (ROI) for e-commerce.
Google Ads
Google Ads are a great option for e-commerce because they’re cost-effective and highly targeted you can target customers based on their location, gender, age group, interests, and more. You can also customize your ad campaigns to fit the needs of your specific business and budget.
According to research conducted by Merkles and reported by Search Engine Land, over half of all retail search clicks come from Google and those clicks have an average order value (AOV) of $94. On top of that, the cost per click (CPC) is fairly low compared to other channels like LinkedIn Ads. This makes Google Ads a great option if you want to increase your visibility without breaking the bank.
Additionally, you can improve your performance with features like Google Shopping. Create great visuals to showcase your products and provide detailed product information to your potential customers.
Instagram Ads
Instagram Ads are viable for e-commerce brands because they can reach a large audience and have a high engagement rate. You can target people based on their age group, interests, and activity on other platforms like Facebook or Twitter.
Instagram isn’t just about pretty pictures it’s also an incredibly powerful marketing tool. For example, if you’re selling apparel, beauty products, or home goods, Instagram is a great place to start advertising due to its visual nature.
According to Statusbrew, Instagram Ads have an AOV of $65 and an average click-through rate (CTR) of 1.08%. While this CTR isn’t as high as Google’s (1.91%), it still gives you good value for money and helps bring more people into your sales funnel than other platforms.
ROI Analysis
When evaluating the ROI of Google Ads and Instagram Ads for your e-commerce brand, it’s essential to consider your specific e-commerce vertical and target audience.
For example, B2B products like industrial equipment or office supplies may not see as much success with Instagram Ads because their target audience may not be active on the platform, whereas Google Ads may be more effective in reaching them through targeted keywords and industries.
Alternatively, high-end luxury products, such as designer fashion or fine jewelry, may not perform as well on Google Ads because their target audience is less likely to actively search for them online. In such cases, Instagram Ads can be a more effective platform, allowing brands to reach potential customers through visually appealing images and engaging videos.
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ROI Comparison Example: Beard King
Last year, my e-commerce client, Beard King, approached me to launch two advertising campaigns to compare the ROI between Google Ads and Instagram Ads. To start, both campaigns had a monthly budget of $2,000.
I used this formula to calculate ROI:
ROI = (Sales from ads – Cost of ads) / Cost of ads
The details of both campaigns were as follows:
Google Ads
- 18-35-year-old men
- 4-week running time
- Focused on the Search network
- Targeted male grooming products (e.g., beard oils and balms) through keywords
Instagram Ads
- 18-35-year-old men
- 4-week running time
- Influencer pages and stories advertisements
- Targeted beard care products
After targeting the same audience and running for the same length of time, the final results of the campaigns in terms of CTR/engagement rate, cost per click (CPC), and total number of clicks were as follows:
Google Ads
- CTR: increased by 7%
- CPC: $0.30
- Total clicks: 654
Instagram Ads
- Engagement rate: increased by 12%
- CPC: $0.50
- Total clicks: 400
If you compare the results of both campaigns, it’s clear that Google Ads yielded a higher ROI for Beard King in this case. Google Ads was able to generate 254 more clicks than Instagram Ads. This represents an additional ROI of 25%. Also, because Google Ads has an average cost per click (CPC) of 30 cents lower than Instagram Ads, Beard King managed to save $76 while gaining those extra clicks!
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Final Verdict: It Depends on You
Both Google Ads and Instagram Ads are powerful tools in any e-commerce marketer’s arsenal but they’re not created equal when it comes to ROI. Generally speaking, Google Ads tend to be better if you’re looking to increase your overall online visibility because its AOV and CTR are higher than Instagram’s but if you’re selling something where visuals are important (like apparel or beauty products), then investing in some well-crafted Instagram Ads could be well worth your effort.
If you’re starting to feel intimidated by any metrics or calculations connected to ROI or ads don’t! Simplify the entire process with BeProfit‘s app. Effortlessly integrate your online store and use the customizable dashboard to get an overview of all your store’s figures so you can make data-driven decisions for your e-commerce business.
FAQ
| ❓ Question | ✅ Answer |
|---|---|
| Which is better for e-commerce: Google Ads or Instagram Ads? | It depends on your product and audience. Google Ads often gives higher ROI for search-driven purchases, while Instagram Ads excel for visually appealing products like apparel, beauty, and lifestyle items. |
| What is the average order value (AOV) for Google Ads and Instagram Ads? | For Google Ads, the average order value is $94. For Instagram Ads, the AOV is $65. |
| How do I calculate ROI for advertising campaigns? | ROI = (Sales from ads – Cost of ads) ÷ Cost of ads. This formula helps measure profitability of your campaigns. |
| Can Instagram Ads target the same audience as Google Ads? | Instagram Ads allow targeting by age, interests, and social activity, but they may not match Google Ads’ search intent targeting. |
| Which platform has a lower cost per click (CPC)? | Google Ads usually has a lower CPC. In the Beard King case study, Google Ads CPC was $0.30, while Instagram Ads CPC was $0.50. |
| How long should I run an e-commerce ad campaign? | Campaigns can vary, but a 4-week period is a common timeframe for testing and comparing performance. |
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