cost per conversion or return on investment
DESCRIPTION
Many people who are trying to analyze their first AdWords accounts become confused about which way they should measure their account level so that they can make adjustments at the keyword level. There are basically two choices; cost per conversion and return on ad spend. Understanding the difference in the two will allow you to understand which the best choice is for you. Remember, however, that they are not inclusive, so you should look at the other indicator at times. Most experts who are seeking to use their advertising for lead generation choose the cost per conversion method as it is easier to see how it impacts your goals and your company’s performance. In order to arrive at this number, simply divide the total cost of the ads by the number of conversions that the program has achieved. If you choose this method, then make sure to know where your breakeven point is, as you do not want to spend more than your leads are paying you. Knowing this point allows you to keep your cost per ad below that level by tweaking your accounts. There is no perfect solution, so remember to push your advertising budget just as far as you can. If you have fixed costs and fixed payouts, then this is probably the model that you need to choose. It is the most important way to go if the purpose of your ad is to generate leads. In addition, do not forget to measure the total number of leads generated by a campaign. The second method used to analyze your AdWords cost is to figure your return on investment. Usually this is achieved by dividing the revenue brought in by a campaign by its cost. This is especially valuable if you work in e-commerce, because it allows you more flexibility when you are selling numerous products. When analyzing your return on investment, it is usually helpful to shoot for a certain percentage rather than an actual amount of money. When using return on investment for an e-commerce business, try grouping your products into categories to determine which categories are most profitable for you. When you do this, you will be able to see where you are generating the most revenue and know how to tweak your AdWords campaigns for maximum success. Both of these metrics should be watched carefully, but depending on the type of business you are operating one may be more valuable than the other one. Do not forget, however, to watch the other one as it can help keep you avoid unnecessary surprises. Source: http://ppcadsthatsell.com/cost-per-conversion-return-investment/TRANSCRIPT
COST PER CONVERSION OR RETURN ON INVESTMENT?
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Many people who are trying to analyze their first AdWords accounts become confused about which way they should measure their account level so that they can make adjustments at the keyword level.
There are basically two choices; Cost Per Conversion and Return On Ad Spend.
Understanding the difference in the two will allow you to understand which the best choice is for you.
Remember, however, that they are not inclusive, so you should look at the other indicator at times.
Most experts who are seeking to use their advertising for lead generation choose the cost per conversion method as it is easier to see how it impacts your goals and your company’s performance.
In order to arrive at this number, simply divide the total cost of the ads by the number of conversions that the program has achieved.
If you choose this method, then make sure to know where your breakeven point is, as you do not want to spend more than your leads are paying you.
Knowing this point allows you to keep your cost per ad below that level by tweaking your accounts.
There is no perfect solution, so remember to push your advertising budget just as far as you can.
If you have fixed costs and fixed payouts, then this is probably the model that you need to choose.
It is the most important way to go if the purpose of your ad is to generate leads.
In addition, do not forget to measure the total number of leads generated by a campaign.
The second method used to analyze your AdWords cost is to figure your return on investment.
Usually this is achieved by dividing the revenue brought in by a campaign by its cost.
This is especially valuable if you work in e-commerce, because it allows you more flexibility when you are selling numerous products.
When analyzing your return on investment, it is usually helpful to shoot for a certain percentage rather than an actual amount of money.
When using return on investment for an e-commerce business, try grouping your products into categories to determine which categories are most profitable for you.
When you do this, you will be able to see where you are generating the most revenue and know how to tweak your AdWords campaigns for maximum success.
Both of these metrics should be watched carefully, but depending on the type of business you are operating one may be more valuable than the other one. Do not forget, however, to watch the other one as it can help keep you avoid unnecessary surprises.
THANK YOU!
Source: http://ppcadsthatsell.com/cost-per-conversion-return-investment/