Anne-Marie’s business goal is to generate online sales of her handmade purses. Her AdWords costs are $100 per week and she wants to know if h
Correct Answer
Costs to produce her purses and revenue generated from her ads
Why is this the correct answer?
To assess whether AdWords is profitable, Anne-Marie needs to track the costs to produce her purses and the revenue generated from her ads. Profitability is calculated as revenue minus total costs — including both advertising spend and production costs. Knowing ad spend alone ($100/week) is insufficient without comparing it to the revenue those ads generate and the cost of goods sold. Only by measuring both production costs and ad-driven revenue can she calculate true profit and determine whether her AdWords investment is worthwhile.
Why are the other options incorrect?
Number of clicks on her ads and costs to produce her purses
Number of clicks tells her how many people visited her site but not whether they bought anything. Production costs alone do not indicate whether advertising is profitable without revenue data.
How many times her ads have been viewed and clicked on
Views and clicks are engagement metrics — they show awareness and interest but not sales or profitability. Knowing how many times ads were viewed does not help calculate ROI.
Number of clicks on her ads and revenue they generated
Clicks and revenue is closer but still incomplete — without knowing production costs, she cannot calculate true profit. High revenue with high production costs could still mean a loss.
Real-World Example
A handmade jewellery seller spends £80/week on Google Ads and generates £320 in weekly sales. Each piece costs £60 to make and she sells 8 units at £40 each. Revenue (£320) minus production costs (£480) minus ad spend (£80) reveals she is actually losing money — a calculation only possible with both cost and revenue data.