True ROI Measurement in Google Analytics

57
True AdWords ROI Measurement For E-Commerce Websites

description

With a properly connected Google AdWords account sending data into Google Analytics, establishing ROI for e-commerce websites is a breeze! Simply navigate to the AdWords clicks report, send a report with the provided ROI number and you are golden, right? Hold up! You are having a case of TBAGD (tool blindness and Google dependence), and you are not alone. I had a wicked case of TBAGD once, but now I have kicked the habit and formed a support group. Our first meeting is this Saturday. Attendees will learn how to calculate the true ROI for their paid media activities, understand important data that needs to be collected outside of Google Analytics, and where to find the goods. The result? Effective end-to-end measurement and a cure for TBAG. An informal poll shows that 9 out of 10 executives recommend TBAGD support to their analysts and marketing folks, with the 10th simply asking “What is the Internet?” Jeff Sauer

Transcript of True ROI Measurement in Google Analytics

Page 1: True ROI Measurement in Google Analytics

True AdWords ROI Measurement For E-Commerce Websites

Page 2: True ROI Measurement in Google Analytics

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

Your Guide

2  

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

Page 3: True ROI Measurement in Google Analytics

Do You Have TBAGD?

Page 4: True ROI Measurement in Google Analytics

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

What is TBAGD?

Tool  Blindness  

Page 5: True ROI Measurement in Google Analytics

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

What is TBAGD?

Tool  Blindness    

Google  Dependency  

Page 6: True ROI Measurement in Google Analytics

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

What is Tool Blindness?

Photo  Credit:  mirror.co.uk        

Page 7: True ROI Measurement in Google Analytics

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

What is Google Dependency?

Page 8: True ROI Measurement in Google Analytics

Let’s Talk About ROI

Page 9: True ROI Measurement in Google Analytics

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

ROI Does Not Stand For:

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

Page 10: True ROI Measurement in Google Analytics

Return on Investment

Page 11: True ROI Measurement in Google Analytics

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

Return On Investment

How  Much  Money  Did  We  Spend?    

Investment  

Page 12: True ROI Measurement in Google Analytics

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

Return On Investment

How  Much  Money  Did  We  Spend?    

How  Much  Money  Did  We  Make?  

Investment   Return  

Page 13: True ROI Measurement in Google Analytics

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

Page 14: True ROI Measurement in Google Analytics

Yet We Send Reports Like

This

Page 15: True ROI Measurement in Google Analytics

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

ROI According to Google Analytics

Page 16: True ROI Measurement in Google Analytics

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

And We Think To Ourselves

Page 17: True ROI Measurement in Google Analytics

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

But Executives Think of Us Like This

Page 18: True ROI Measurement in Google Analytics

It’s Not Your Fault

Page 19: True ROI Measurement in Google Analytics

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

It’s Not Your Fault

Page 20: True ROI Measurement in Google Analytics

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

It’s Not Your Fault

Page 21: True ROI Measurement in Google Analytics

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

It’s Not Your Fault

Page 22: True ROI Measurement in Google Analytics

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

You Simply Have a Case of TBAGD

Tool  Blindness    

Google  Dependency  

Page 23: True ROI Measurement in Google Analytics

Time to Evolve

Page 24: True ROI Measurement in Google Analytics

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

Evolution of Man

Photo  Credit:  wallpapersus.com          

Page 25: True ROI Measurement in Google Analytics

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

Since We’re an Un-Conference

Page 26: True ROI Measurement in Google Analytics

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

Let’s Remove the Google Goggles

Let’s  Remove  the  Beer  Goggles  

Page 27: True ROI Measurement in Google Analytics

Sidebar: Google Image

Search for Ugly to Pretty

Page 28: True ROI Measurement in Google Analytics

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

Ugly to Pretty = Goldmine

Page 29: True ROI Measurement in Google Analytics

ROI in Google Analytics

Page 30: True ROI Measurement in Google Analytics

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

This is ROI in a Vacuum

Page 31: True ROI Measurement in Google Analytics

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

ROI by Very Definition, That’s All  

By  Defini.on,  This  is  Return  on  Investment  

 

Page 32: True ROI Measurement in Google Analytics

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

Investment and Revenue Are Important

Investment  

           

Page 33: True ROI Measurement in Google Analytics

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

But… We Forgot About Profit

We  Forgot  About  Dre  Profit  

Page 34: True ROI Measurement in Google Analytics

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

We’re Still Far From Supermodels

Page 35: True ROI Measurement in Google Analytics

Finding Your True ROI

Page 36: True ROI Measurement in Google Analytics

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

How ROI Should Really Be Calculated

Revenue  

Page 37: True ROI Measurement in Google Analytics

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

Subtract Our Ad Spend

Revenue  

Adver.sing  Investment  

Page 38: True ROI Measurement in Google Analytics

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

Subtract Cost of Selling Each Product

Revenue  

Adver.sing  Investment  

Product  Cost  

Page 39: True ROI Measurement in Google Analytics

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

Subtract Fixed Costs of Business

Revenue  

Adver.sing  Investment  

Product  Cost  

Fixed  Costs  

Page 40: True ROI Measurement in Google Analytics

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

Now You Have Net Profit

Revenue  

Adver.sing  Investment  

Product  Cost  

Fixed  Costs  

Net  Profit  

Page 41: True ROI Measurement in Google Analytics

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

Here’s an ROI Equation to Use

Gain  From  Investment  (Net  Profit)  

Cost  of  Investment  

Cost  of  Investment  

ROI  

Page 42: True ROI Measurement in Google Analytics

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

Pulling It All Together

Revenue   $82,730     100%  

Page 43: True ROI Measurement in Google Analytics

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

Pulling It All Together

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

Page 44: True ROI Measurement in Google Analytics

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

Pulling It All Together

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

AKA  ROI  in  AdWords  

Page 45: True ROI Measurement in Google Analytics

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

Pulling It All Together

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

Page 46: True ROI Measurement in Google Analytics

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

Pulling It All Together

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%  

Page 47: True ROI Measurement in Google Analytics

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

Pulling It All Together

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%  

Page 48: True ROI Measurement in Google Analytics

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

Pulling It All Together

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%  

Page 49: True ROI Measurement in Google Analytics

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

Pulling It All Together

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%  

Page 50: True ROI Measurement in Google Analytics

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

We’re Getting Closer

Page 51: True ROI Measurement in Google Analytics

Incorporating Lifetime Value

Page 52: True ROI Measurement in Google Analytics

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

Future Purchases = No Ad Spend?

Assume  No  Future  Spend  

Page 53: True ROI Measurement in Google Analytics

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

Future Purchases = No Ad Spend?

Assume  No  Future  Spend  

AND  

Customer  Has  1.5  Life.me  Purchases  

Page 54: True ROI Measurement in Google Analytics

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

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%  

Page 55: True ROI Measurement in Google Analytics

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

We Have Cured Measure Blindness!

Page 56: True ROI Measurement in Google Analytics

Thank You, Old Chap!

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

Page 57: True ROI Measurement in Google Analytics

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

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

Thank You!

57