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1. Executive Summary
Finding ROI with Online Advertising Campaigns
Search engine keyword programs like Google AdWords and other pay-per-click (PPC)
advertising campaigns have proven to be an exceptionally inexpensive method for
generating web traffic, qualified leads, and online web-sale revenues. Determining
how much daily budget to set aside; knowing the right amount to spend per-click;
and assessing ROI, can be much more difficult tasks. Use our downloadable Online
Advertising ROI Calculator for help with your next program.
What are the Key Considerations?
• Product Price - what is the online selling price for your product?
• Cost of Goods Sold - for each unit of product sold, what are your costs?
• Lead Conversion % - what percentage of web visitors will purchase?
• Daily Advertising Budget - what is the max you are willing to spend daily?
• Cost Per Click - how much does it cost to purchase keywords/ad clicks?
• Daily Leads - how many leads (web visitors) will your budget provide?
• Revenue Per Month - how much incremental revenue will be generated?
Action Plan:
1. Understand Pay-Per-Click - read our summary Pull Prospects with Google
AdWords to get a high level understanding of this concept.
2. Short-List your Keywords - create a list of keywords that are likely to be
searched for by your target audience. Use Google's Keyword Tool to generate
a long list of related keywords and phrases, and view pay-per-click estimates.
3. Determine Lead Conversion % - if you have transactional data already,
identify how many visitors it takes to generate one new web-sale. If you do
not have the data, make a conservative estimate such as 0.05% conversion.
4. Assess ROI for Campaign - use our Online Advertising ROI Calculator to
determine what kind of revenue & ROI to expect based on your daily
advertising budget. Reassess conversion rates after the first month.
© 2009 Demand Metric Research Corporation