Samuel Ng asked:
Pay per click marketing involves quite a lot of numbers. This might be the reason why so many people get so confused & frustrated. Today, we want to look at some numbers you simply cannot miss.
Ad Spend & Clicks
You must know your average daily ad spend & your average daily clicks. Take your daily ad spend divided by your number of clicks daily & you will get your average cost per click on a daily basis.
Take note of your average monthly ad spend & your average monthly clicks. Take your monthly ad spend divided by your number of clicks monthly & you will get your average cost per click on a monthly basis.
Why do you look at these numbers? So that you can keep a watch on your overall advertising budget & the average cost of all your clicks. In this way, when your bill comes you will not get an unpleasant surprise.
Clicks Vs Conversions
You want to look at your average click through rates & your average conversion rates. Click through rates will affect your number of unique web visitors & conversion rates will affect your profits.
What People Usually Miss
Cost per conversion is a number that most people usually miss & this is very crucial! This refers to much money it takes for you to get a sale. If your cost per conversion is lower than your average profit per sale, you are profitable, if it is the other way, you are losing money.
If you are generating leads before you present your offers, I can tell you that you are doing the right thing. At the same time, your calculation will be different. Not complex, just different.
First, you must find out your cost per lead, take the amount you spent on advertising divided by the number of leads you get. Next, you must find out your value per lead, take the amount of money you earned from these leads divided by the number of number of leads you have.
If your cost per lead is lower than your value per lead, you are making money, if is it the other way, you are losing money. This is a very simplified yet useful way of looking at your numbers.
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