True ROI Measurement in Google Analytics

transcript

True AdWords ROI Measurement For E-Commerce Websites

Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng

Your Guide

Jeff Sauer Marketer and Entrepreneur Jeffaly.cs and Knowledge Land Minneapolis, MN, USA google.com/+JeffSauer knowledge.land

Do You Have TBAGD?

What is TBAGD?

Tool Blindness

What is TBAGD?

Tool Blindness

Google Dependency

What is Tool Blindness?

Photo Credit: mirror.co.uk

What is Google Dependency?

Let’s Talk About ROI

ROI Does Not Stand For:

•  Regal or Idiot •  Roided Out Imbecile •  Randy ‘Ol Ins.gator •  Rager on Ibiza

Return on Investment

Return On Investment

How Much Money Did We Spend?

Investment

Return On Investment

How Much Money Did We Spend?

How Much Money Did We Make?

Investment Return

Yet We Send Reports Like

ROI According to Google Analytics

And We Think To Ourselves

But Executives Think of Us Like This

It’s Not Your Fault

You Simply Have a Case of TBAGD

Tool Blindness

Google Dependency

Time to Evolve

Evolution of Man

Photo Credit: wallpapersus.com

Since We’re an Un-Conference

Let’s Remove the Google Goggles

Let’s Remove the Beer Goggles

Sidebar: Google Image

Search for Ugly to Pretty

Ugly to Pretty = Goldmine

ROI in Google Analytics

This is ROI in a Vacuum

ROI by Very Definition, That’s All

By Defini.on, This is Return on Investment

Investment and Revenue Are Important

Investment

But… We Forgot About Profit

We Forgot About Dre Profit

We’re Still Far From Supermodels

Finding Your True ROI

How ROI Should Really Be Calculated

Revenue

Subtract Our Ad Spend

Revenue

Adver.sing Investment

Subtract Cost of Selling Each Product

Revenue

Product Cost

Subtract Fixed Costs of Business

Revenue

Product Cost

Fixed Costs

Now You Have Net Profit

Revenue

Product Cost

Fixed Costs

Net Profit

Here’s an ROI Equation to Use

Gain From Investment (Net Profit)

Cost of Investment

Pulling It All Together

Revenue $82,730 100%

Revenue $82,730 100% Ad Spend $10,942 -‐

Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656%

AKA ROI in AdWords

Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75%

Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75% Gross Revenue $9,767 12%

Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75% Gross Revenue $9,767 12% Total Fixed Costs $5,000 6%

Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75% Gross Revenue $9,767 12% Total Fixed Costs $5,000 6% Net Profit $4,767 6%

Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75% Gross Revenue $9,767 12% Total Fixed Costs $5,000 6% Net Profit $4,767 6% True ROI 44%

We’re Getting Closer

Incorporating Lifetime Value

Future Purchases = No Ad Spend?

Assume No Future Spend

Future Purchases = No Ad Spend?

Assume No Future Spend

Customer Has 1.5 Life.me Purchases

We Find the True ROI of our Efforts

Revenue $124,095 100% Ad Spend $10,942 -‐

Return on Ad Spend $113,153 1034%

Cost of Goods Sold $93,031 75% Gross Revenue $20,122 16%

Total Fixed Costs $5,000 6% Net Profit $15,122 18% True ROI 138%

We Have Cured Measure Blindness!

Thank You, Old Chap!

Source: hkps://answers.yahoo.com/ques.on/index?qid=20080201184249AAHqd5l

Jeff Sauer Marketer and Entrepreneur Jeffaly.cs and Knowledge Land Minneapolis, MN, USA google.com/+JeffSauer knowledge.land

Thank You!

True ROI Measurement in Google Analytics

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