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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.
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).
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:
- Visitor Interest Level - The interest level of the visitor is
maximized by matching the right visitor, the right place, and the right
time.
- Offer Attractiveness - The attractiveness of the offer
includes the value proposition and how well it is presented. TIP: Small,
impulse items typically have a higher conversion rate than large
shopping items.
- Ease of Process - The ease with which the visitor can
complete the desired action is dependent on site usability. Important
considerations here include intuitive navigation, contact info capture
page, Buy Now or Apply Now buttons and fast loading pages.
