Finch separates the Google AdWords advertiser landscape into two categories:
Advertisers in segment #1 treat Google Ads spend like a commission on confirmed sales, while segment #2 sees it as a general advertising expense. The distinction is critical. In online advertising, access to accurate data determines success. The better informed a google adwords advertiser is, the more confidently they can invest in top-performing keywords—maximizing return on investment by identifying which clicks lead to revenue.
Traditionally, segment #1 includes businesses with direct conversion paths—like eCommerce platforms, travel booking engines, subscription services, and online ticketing. These models benefit from immediate revenue attribution. In contrast, segment #2 is dominated by adwords companies focused on lead generation, where a prospect fills out a form or calls a sales rep. Revenue depends on sales team follow-up, making conversion rate optimization and CRM tracking essential.
Even a decade later, the divide between transaction-based and lead-generation advertisers continues to define digital marketing strategies. Google AdWords advertisers in both groups rely on different tactics—those with immediate sales focus on precise bid control and direct revenue metrics, while lead-focused adwords companies depend on long-term tracking, CRM integration, and quality lead flow.
As Google Ads evolves with automation, predictive analytics, and new ad formats, understanding your segment helps shape everything from campaign goals to advertising budget allocation.
Connecting ad spend to revenue is how all segment #1 companies should be operating in order to operate profitably. However, until now the complete expense-to-revenue workflow was missing for segment #2. This is what last week’s Google AdWords announcement is all about. It is important for an advertiser for two reasons:
One can argue that you were always able to measure the return on ad spend (ROAS) if you had tracking setup correctly, which is in some cases true. However, measuring is only moderately interesting unless you can use it to improve and leverage future performance.
At Finch we have been tracking and measuring success through cost-per-value or cost-per-profit optimization models for the past 3 years using a high-performance bidding engine to replicate and leverage success automatically. The key is to tie the session data of the click (keyword, ad group, etc…) to the amount of the transaction (revenue or profit).
To do this for a #2 segment client, the click session data needs to be tied to the financial outcome without the luxury of a shopping cart. Instead of a shopping cart, a lead is created for the sales team through a web form. In order for this lead to be tracked through the full sales cycle, we need to tie the session data (keyword, ad group, etc) to the record that is created in the CRM system so that when a deal closes it can be tied back to the keyword and ad group that initiated the lead. That way you can track at a keyword level if a click is performing above or below your financial requirements… and make bid adjustments accordingly.
Here is a video on why this is game changing for most advertisers:
Being able to close the cost/profit loop for #2 segment advertisers is the holy grail for financial gains and provides huge competitive advantages for advertisers. Combined with Google’s recent remarketing for search announcement, you can gain huge insights to where the industry is going: Closed loop bidding for clicks inside your sales funnel!
The fun is about to begin, but you may want to start thinking about how you are going take advantage of this before you get left behind. The AdWords game is about to change in a way much bigger than the market is prepared for. Finch is ready because we have been working on this for the past 4 years! Sign up for a free audit of your Adwords today and we’ll show you how!