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Forget ROI - Just Give me Profits

February 28, 2004

I just finished putting together a report from some experimentation done with one of my accounts. I found the results interesting, and thought some here might find them interesting as well.

This is a site that I’ve been working on since pretty much the beginning of AdWords, so I’m very familiar with the KWs and ads for it.

I often find that people look at ROI over the bottom line, when its the bottom line that means more to me.

Average Sale Price: Roughly $200 (Numbers have been rounded off )

Average Position	CTR	Clicks	CPC	Spend	Profits	ROI	Conversion Rate	Sales
1.1	16.5%	993	$3.25	$3227	$744	23%	2.0%	20
3.5	8.1%	512	$2.68	$1272	$1187	87%	2.5%	13
7.6	2.2%	122	$1.12	$136	$644	471%	3.2%	4

If we went by straight ROI, the 7.6 position is the way togo, however, position 3.5 makes $543 more over the trial period, and I’d rather have that bottom line. Even position 1.1 ends up with a higher profits than 7.6 with a much lower ROI.

As expected, there is a significant conversion difference between the various positions. The CTR of the ad in the premium position, admittedly, did surprise me. And therefore the CTR difference between position 1.1 and 3.5 was quite significant. The CTR of position 7.6 was around my projections.

But we really aren’t done yet. This site’s visitors usually buy more than once during a year, without going through the math of actual returning customers, I’ll simplify it saying that it averages 1.3x per customer per year. So
1.3 x $200 x #Sales - AdWords spend
is what we should consider. This leaves us with this profit:

1.1 position: $1972
3.5 Position: $2007
7.6 Position: $903

Clearly 3.5 is the best position for this particular product. However, (and this is where egos come into play), the difference between being first and on the side is minimal, and those would be sales that your competitor didn’t get. If the projections were made into year 2, then position 1.1 is definitely the way togo as those returning in the 2nd year will definitely make the profit margins worthwhile.

However, position 1.1 must maintain that conversion rate. Any drop with that CPC and the site will quickly get into trouble. Position 3.5 can drop the conversion rate a little and still be quite profitable due to it lower spend than the premium position. In fact, if its conversion rate drops to 2%, its still as profitable as position 7.6 in the short run, and better in the long run.

If this site offered a newsletter to keep in contact with former buyers and help to increase the average buys/year/customer, then I would definitely suggest the top position for the sheer volume of sales and therefore, a higher projected number of signups than the other positions.

In any case, enough ranting for now, don’t measure everything by ROI. It is definitely a measuring tool to be used, but don’t forget about the bottom line.

Written by Brad Geddes aka eWhisper · Filed Under Blog, Google AdWords, PPC Info | 2 Comments

Foreign Language Keywords

February 24, 2004

In the United States, the largest growing online sector is Spanish speakers. Many of this demographic is bilingual. They will often search for Spanish words on Google’s English website. Targeting these keywords can be a great boon to your business.
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International Targeting with AdWords

February 24, 2004

Google’s pay per click system targets more than 250 countries. If you ship internationally, you should not miss this great advertising opportunity.
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PPC Description Writing: CTR & Branding

February 12, 2004

If you have chosen CTR & branding titles for your pay per click search engine marketing, then you need a description that reinforces your title.

Since you have achieved both goals in your title, it’s time to continue that in the first line of your description.
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Description Writing: Branding Descriptions

February 12, 2004

If you have chosen the advertising method of high CTR titles, then you will want your description to include your company name.

Descriptions get read by many people who never click on an ad or reach your site on their first exposure to your company name. However, if your company name is seen over and over again, people will start to remember and associate it with an ideal that it has a lot of internet visibility, and will be more likely to visit you in the future.
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PPC Description Writing: High CTR Descriptions

February 12, 2004

If you have chosen the title branding method of advertising, then your company name is already prominent in your pay per click listings in the title. Therefore, the best keywords to lead off a description is the exact keyword that makes the ad appear.
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Limousine Marketing

February 1, 2004

I’ll always remember the first time I stepped into a limo. I was 17 and a wearing a too-tight rented tux. My date looked incredible in a sparkly dress, and I knew that my prom was going to be fantastic.

Looking back on that first limousine ride I can pinpoint some of the factors that made it so great, and some of the reasons that I take every opportunity that I can to ride in one today.

First and foremost was the sense of luxury. A limousine ride would be nothing if it did not transmit some sense of elegance, and a sense of the out of the ordinary. While I’m sure that there are people to whom riding in a limousine is the equivalent of taking a cab, it is not to these fortunate few that a limousines marketing system should target. If you own or operate a limousines company, market yourself as a special treat that should be enjoyed as often as possible. People love to feel special, and a limousine ride makes them feel as if they have been flown to the moon.

But when you come back down from that trip, you want your customers to know that a limousine ride is not just for proms and weddings. It can be for any special occasion, from a romantic dinner on the town, to nothing more than an excuse to say I love you.

Limousine marketing has made great strides in the past fifteen years, becoming more proactive and more streamlined at the same time. In fact, with the advent of the Internet, marketing limousine companies has been about bringing the advertising to the people, rather than just letting the people come to you.

With over 100 million people logging on to the Internet in the United States alone, it comes as no surprise that some forward thinking entrepreneurs have begun to use online advertising to sell their products and services. However, in the early days of these advertising systems, ads were placed scattershot across the board of web sites, in the hopes of picking up a few customers by a sort of dynamite fishing technique.

Nowadays times have changed. With a direct, geo-targeted limousine marketing system you can actually place you ad exactly where your customer base will see it. Imagine using the Internet’s most powerful tool—the online search—to know exactly who in your community was looking to rent a limo, and then having your ad on exactly those people’s screens every time they use a search that includes your vertical.

It’s not science fiction, it’s reality, and today’s savvy limousine marketer knows that search-based, online advertising is the smart way to go to take your limousine company to the very top.

Written by Brad Geddes aka eWhisper · Filed Under Vertical Marketing | Comments Off