Measuring Marketing Campaign Effectiveness

Clicks Are Not Buyers

By now most online entrepreneurs have heard of Cost Per Acquisition or CPA. If you haven't then this post will hopefully bring you up to speed.

One of the major tasks of online marketers is to successfully measure the effectiveness of online advertising campaigns.

Without clear marketing intentions how does a site owner know if they are measuring marketing campaign effectiveness with their online advertising efforts.

Most online business owners tend to focus on clicks, page views and impressions when in reality none of these really tell you much about your customers. Clicks are really not buyers.

So when executing marketing campaigns you need to define what success looks like up front, along with a way to measure whether a CPA plan actually worked.

Sometimes being creative will get you some incredible results, but in most cases it pays to have an action plan and a way to quantify what results you are targeting.

In order to measure your marketing campaign effectiveness you must be able to gauge your promotion on a defined criteria.

The measurement could be sales volume, revenue targets or a call to a 1-800 number. It doesn't have to be excessively complicated and over thought. It just requires applying some simple thought and a few easy calculations.

Lets Take a Look at a Basic Online Campaign and Do the Math.

Lets assume conversion rates on a website are three percent, meaning 3% turn into buyers.

Also, let's assume as an online business owner you commit to an online ad campaign of $6,000.

In addition, the ad campaign generated an additional 4,000 site visitors. The hypothetical results would look like this.

What this translates to is that if the ad campaign is to break even each buyer must purchase at a minimum of $50 of product as a result of your advertising efforts.

Said another way it cost you $50 to get each new buyer.

This result may be a good thing depending on your desired profit margin.

In fact, you will never know how you are performing unless you do the calculations and have a target to measure your results against.

Cost Per Acquisition or (CPA) is your go to measurement to track Return On Investment (ROI) for any online ad promotion.

This kind of cost analysis will assist you in evaluating and arrange your ad campaign investments to help you understand when they succeed and when they don't.

With this information in hand, you can better manage your advertising efforts and identify which campaigns work and which promotions don't live up to expectations.

All the best to your online advertising success.

Patrick

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