| ||
|
|
|
|
| ||
|
|
|
How to Track Online Marketing ROI Using Cost-Per-Action
Forget clicks, page views, and impressions; the only way to effectively track your online marketing ROI is through Cost-per-Action (CPA) analysis. As the online advertising market is poised to grow nearly $10 billion over the next six years, it's essential that we remember the importance of measuring the effectiveness of that spending. There's no point undertaking any marketing or advertising campaign unless you can measure its results. And results are best measured in terms of return on investment (ROI). Unfortunately, in the world of marketing and advertising, many businesses seem to be losing touch with their general objectives. The tools may have changed, but the principles remain the same - Your advertising campaigns are only successful if they meet the objectives you set out to achieve. So if you're after increased sales, you need to measure the cost of each sale generated to determine your return on investment. Fortunately for advertisers, tracking ROI for online advertising is much easier than it is for traditional forms of advertising, such as TV, Radio, Newspaper, Magazine, and Billboard. When you market online, every advertising campaign can be tracked and measured all the way down to the penny. This is why more and more advertising dollars are being spent online every day. Why Not Cost-Per-Click or Cost-Per-Impression? When it comes to tracking campaign effectiveness, many businesses rely on Cost-per-Click (CPC) and Cost-per-Impression (CPM) statistics. But what many people forget is that for most businesses, clicks and impressions don't earn you money. So by tracking clicks and impressions, you're not really tracking return on investment. The same is true of page stats. If you're like most businesses, impressions, clicks, and page views are simply a means to an end. (In fact, without corresponding sales conversions, they're nothing more than unjustifiable expenses.) If you only earn revenue from sales, you need statistics linking costs and sales. In other words, you need to measure cost-per-action (CPA). Cost-Per-Action (CPA) In a CPA campaign, you run an online ad on third party sites and they charge a commission when a lead is generated or converted. It's performance-based pricing. This means the publisher wears most of the advertising risk, as their commissions are dependent on good conversion rates. Perhaps the most widespread use of CPA is affiliate marketing. With affiliate marketing, you determine what actions you will reward and how much you're willing to pay per action. For example, you might engage an affiliate site to promote your business. If they generate sales for your business, you can pay them a commission. Your cost-per-action would then be the cost per sale or lead generated. Tips on Conversion The following conversion tips will help you plan your CPA campaign and avoid some common pitfalls. 1) How are sales and leads recorded? For many businesses, the obvious result which constitutes a conversion is a sale. If your sale is recorded or registered online (e.g. e-commerce), it can be considered a measurable action. This means you can choose a sale as the desired action in your CPA campaign. Depending on the aim of your campaign, you may want to measure other outcomes in addition to, or instead of, sales. For instance, you might measure leads in the form of membership registrations, newsletter subscriptions, software downloads, or just about any other activity beyond simple page browsing. So when your customer clicks register, or subscribe, or download, etc., the conversion is automatically registered and the details are fed back you're your CPA campaign. In either case, at any time, you can log in and view your campaign results in real time. 2) Set up a landing page to capture lead contact details If you're paying for leads, you obviously need to know when a lead is actually generated. Generally a lead becomes a lead only when the customer supplies you with their details (name, contact numbers, email, etc.). This means you need to set up a landing page on your site capture these details. Your capture page can be collect contact information or it can be as simple as a signup for a monthly newsletter. 3) Get your CPA provider to set up your landing page If you don't have the time, inclination, or resources to set up the necessary forms and database on your own site, the CPA provider can do it on their hosted server. They collect the leads and calculate the statistics. For many businesses, this is the ideal option because it saves them time and money, and there are no tracking discrepancies. 4) Find a CPA provider you can trust If your CPA provider will be collecting leads and calculating statistics, you need to know you can trust them. There are plenty of trustworthy providers out there; you just need to find them. A trustworthy provider will find out what your exact needs are and spend time researching your niche market online. By performing this marketing analysis, your provider will be able to tell you exactly how much business they can bring you on a daily, weekly, or monthly basis. If they can't provide you with this important information, then this is a good indication that you are not speaking with a professional internet marketer. Just as importantly, with a trustworthy provider you'll be able to personally speak with the internet marketer who will be working on your project. This person will be an expert in the field of internet marketing, not just a sales rep. 5) Avoiding excess fees WARNING: Some CPA providers charge a setup fee ($2,500 to $10,000) and/or a network fee (20% to 30%) for each sale or lead that is generated. Before committing to a provider demanding high fees, make sure you are getting more for your money. Most of the time high fees simply mean the sales rep is getting a higher commission! 6) Measuring your conversion rate The Formula for measuring CPA is by dividing the total cost per advertising campaign by the total number of actions (conversions) that were received from each ad campaign. For example, if your online ad campaign costs $1,000 and generates 50 sales or leads, your cost per action (CPA) is $20.00 each. 7) Improving your conversion rate A high conversion rate depends on several factors:
Because CPA allows you to identify exactly how much it will cost to acquire a customer, there's no guesswork involved. You have the ability to precisely calculate your ROI. And because online tools and ad serving technologies allow you to monitor effectiveness in real time, you can even tweak campaigns while they're still running. If you can master effective online advertising, you'll not only save thousands in implementation costs, you'll also reap the rewards of a far higher return on investment. About The Author Rick Crosby is CEO of a full-service internet marketing and online advertising agency, MarketingWebTraffic.com. Visit http://www.marketingwebtraffic.com for further details or contact Rick directly at 727-490-5739 or email mailto:rick@marketingwebtraffic.com.
Add to these social bookmarking sites: 
MORE RESOURCES:
Notice: Undefined index: TITLE in /var/www/vhosts/harmonyhollow.net/httpdocs/webmaster-resources/internet-marketing/inc/rss.inc on line 103 Google News |
|
|
|
RELATED ARTICLES
Top 7 Internet Marketing Sites for 2005 Are you confused by what really works when marketing your business online?I know the feeling. There are literally thousands of sites out there that either promise to teach you how to effectively market online or tell you that they have the magic formula. Online Sales : 10 High Decibel Tricks To Magnify Your Sales Online sales is like a fine art and you have to learn the ropes on how to convert traffics to buyers.Below are online sales secrets to help:1. Shopping Search Engines, The Benefits and Explanations The Shopping Search Engines are a new breed on the Internet market, they are a research tool for both consumers and retailers. Using a shopping search engine the consumer can search at once more than one merchants, products and look at the prices in only one place. The Reality Of How To Make Money In An Online Business "Making money online quick and easy" seems to be the buzz word today in the home business and money making arena online these days. It would seem at first glance that making money online seems to be a very simple thing. Headlines Bring Sales--Where and How to Use Them - Part 2 Headlines are short vital statements to stimulate your potential customers and clients to take action. That means sales! Since you only have 10 seconds to attract your visitor or reader, create headlines to make ultimate sales. How A Change in Perspective Can Help You Make More Holiday Season Sales: Pt. One Some sites are perfect for the Christmas season - their products fit easily into the idea of gift-giving. But what if the products and services you offer are for small business owners?Or, as many of my clients ask, how do I survive the holiday season if I sell intangibles?When a couple of people brought this question up to me in early fall, my answer was that I'd probably make enough money in October not to have to worry about November and December at all. Help Your Online Customers Feel Confident Even If Theyve Never Heard Of You The Internet world is truly exciting - there is no limit to what you can learn or how much you can earn. Every day, thousands of new people are staking their claim on the Internet, and putting up their own personal online storefronts, proudly displaying their wares to millions of potential customers. The Seven Tips That Ensure Your Success Online Whether you are now looking for opportunities to start your online business or an amateur wanting to improve your profits, having the right frame of mind and attitude is critical for achieving your success. The following the tips outlined below, you'll keep yourself on the right track to your success. The Power Of Cross Promoting Cross promotion is, without doubt, a powerful technique used by many people to increase the exposure of their products or services when they start their Online Business.When you start your Online Business, decide what type of promotional exchange methods you would be interested in practicing and contact other fellow Online Business owners to discuss an exchange for mutual benefits. Getting Visitors To Stay Through Web Based Marketing 9/10 times your web site visitors won't stay for more than 15 seconds. This is how you get them to stay, or should I say, get them to come back!For most of you, your web site is a great brochure. Joint Ventures - How They Can Benefit Your Business Joint ventures are partnerships in which two or more businesses join forces to work together in promoting each other's business. Both parties agree to endorse each others service or products on their website, in their newsletters or mailings. Single Best Way To Turn Visitors Into Rabid Buyers Did you know that, on average, only 2% of visitors to your website will purchase your product or service?Good news, you can improve that number, quite radically by collecting subscribers and re-marketing your site to them.Two ways you can do that - a hard way and an easy way. Setting Your Online Business Up for Success! There is a common misconception that an "online business" requires no investment.. Internet Marketing Promotion And Advertising Can Build Your Business Internet marketing promotion & advertising are crucial for your website's success. Take time to create a buzz about your site and that will keep people coming back. What You Wont Learn In Business School What You Won't Learn in Business School----------------------------------------We all know the traditional road to the financial freedom of retirement. You go to work, 40, 50 or even 60 or more hours every week for 30 or 40 years. It Really is only early Days in the Internet Gold Rush.... One of the questions that I am getting more and more used to hearing lately is:'Is it too late for me to start an online business? Have I missed the boat and have all of the best opportunities been and gone?'My reply is always along the lines of, 'Absolutely not - there is still a wealth of opportunity online and even if you start your online business tomorrow, you are still well ahead of the majority of people'.I genuinely believe that this is the case but I know that many people do feel that they may have missed the boat and that there is nothing more that can be done online that isn't already being done by someone else. The Seven Secrets of a High-Sales Marketer If you want to boost your website sales to the next level, you've got to think and act like a high-sales marketer. Here's how:1. Free Content -- or Forbidden Fruit? Dear Cathy:I just found an interesting article on someone else's website. What are the rules if I want to put it into my own ezine? Can I paraphrase and indicate where I found the info?Or must I request permission to reprint, then list the item word for word? I am finding that most requests for permission go unanswered. Time is Money in Online Marketing We all do it.Spend time and money sourcing those vital pieces of kit to get the best from our endeavors. Discover Which Sales Triggers Are Most Effective When Mixed With SEO! We all know the importance of gaining top visibility to a specific target audience on the major search engines. After all, you really need qualified traffic or those who are actually searching for goods and services that you are offering.
|
| Home | Site Map |
|
| © 2006 | |
