Using Data to always deliver a positive ROI on your paid marketing

Predictable paid marketing

Getting sales and leads without losing money.

Today’s outcome• Understanding the key performance metrics of SEM, Display and

Email• Determining what each click is worth• Predicting outcomes for campaign

Tweet #OMSyd and @dennisgraham7

What this presentation is NOT about• The mechanisms of SEM, email or display• How to write good copy• How to create effective ads, banners and emails

Even if you’re the worlds most average marketer, understanding and using the right metrics will make you a good marketer.


Most marketers with a budget are like a kid in a candy store


Have you ever felt like…Your marketing campaigns spent more money than new revenue generated?


Something to tweet about…If your marketing is cost effective, you never have to stop it.

…And you’ll never hear the line “You’ll have to cut back on marketing spend, as it’s costing the business too much”


First rule to successful marketing• Know what a customer is worth, and• Know your average conversion rate by channel

You simply cannot be an effective marketer without knowing those 2 things


Second rule to successful marketing…• If a dollar spent, doesn’t bring in two (or more).

Don’t spend the dollar.


Let start with search engine marketing


Assumptions• You’re targeting the right keywords• You know the value of your custom• You know your average conversion rate for either organic or paid

search


The most important metric in SEMKey variable• Cost per click


Yep, that’s it. The single most important metric in SEM is cost per click


Profit per customer

Searches CPC Position CTR Clicks CostConversion

RateConversions CPA

Gross Profit

Net Position

$150 5,000 $15 1 10.0% 500 $7,500 5% 25 $300 $3,750 -$3,750$150 5,000 $10 2 7.0% 350 $3,500 5% 18 $200 $2,625 -$875$150 5,000 $8 3 5.0% 250 $2,000 5% 13 $160 $1,875 -$125$150 5,000 $6 4 3.5% 175 $1,050 5% 9 $120 $1,313 $263$150 5,000 $3 5 2.5% 125 $375 5% 6 $60 $938 $563$150 5,000 $2.5 6 2.0% 100 $250 5% 5 $50 $750 $500$150 5,000 $2.0 7 1.5% 75 $150 5% 4 $40 $563 $413

Main variable Flow on effect

Simplified SEM possibilities chart


Wow, look at that Batman, the most profitable spot is where you’d least expect it

But Google suggests a first page bid of…• Forget what Google suggests you bid… Do your own maths and see

what’s the sweet spot for you


SEM Pro tips• Split test your ad creatives• Know if people purchase or become leads on mobile or desktop or both

• Then apply the math regarding costs/conversions

• Use the following ad extensions (to consume more real estate and achieve higher CTR):• Call outs• Site links• Telephone

• Use {KeyWord} insertion. It totally makes every ad relevant!• Add negative keywords… If you products aren’t free, don’t bid on keywords

that contain the word “free”, etc.Tweet #OMSyd and @dennisgraham7

Let’s move on to display advertising


Assumptions• You’re targeting is right, irrespective of whether it’s• Remarketing• Placements• In-market segments• Email list upload, etc..

• You know the value of your customers• You know your display marketing’s average conversion rate… (If you

don’t, take your website crappiest performing channel – and assume it’s around that)


60% of mobile banners ads are clicked by accident


The most important metric in display advertisingKey variable• Cost per click


The less you pay, the more you reap


Profit per customer

CPC Clicks CostConversion

RateConversions CPA

Gross Profit

Net Position

$150 $10 500 $5,000 2% 10 $500 $1,500 -$3,500$150 $7 500 $3,500 2% 10 $350 $1,500 -$2,000$150 $5 500 $2,500 2% 10 $250 $1,500 -$1,000$150 $1 500 $500 2% 10 $50 $1,500 $1,000$150 $0.50 500 $250 2% 10 $25 $1,500 $1,250$150 $0.25 500 $125 2% 10 $13 $1,500 $1,375$150 $0.10 500 $50 2% 10 $5 $1,500 $1,450

Main variable Flow on effect

Display pro tips• Split test your ad creatives• Implement impression caps• Try the different segmenting options (Google, Facebook and LinkedIn

offer many powerful segmentation tools• Upload your leads database into Facebook or Google, and then

remarket to them• Double-pro tip. Segment your database.

• View my slideshare on Customer Journey Optimization (pro placement marketing)


Let’s move on to sponsored email marketing


Assumptions• You’re targeting the right audience• Targeting the right audience via email can convert as well as any of your other

best performing channels or campaigns

• You know the value of your customers• You know your average conversion rate for any well targeted audience

and not so well targeted audiences (because not all email lists are made equal)


Most important metrics in sponsored email marketingKey variable• Price of sponsorshipCritical information (need to know)• Number of subscribers• Average open rate• Average click through rate

The critical information determines what you should pay sponsorship


A marketer just paid what’s on the rate card to these publisher


In this example:

• Subscribers, profit per customer and conversion rates are static• But we play around

with:- Cost- Open rates- CTR


Scenario One 40% opens 10% CTRProfit per customer

Cost of Sponsorship SubscribersOpen Rate

Opens CTR ClicksConversion

RateConversions CPA

Gross Profit

Net Position

$150 $6,000 10,000 40% 4,000 10% 400 5% 20 $300 $3,000 -$3,000$150 $5,000 10,000 40% 4,000 10% 400 5% 20 $250 $3,000 -$2,000$150 $4,000 10,000 40% 4,000 10% 400 5% 20 $200 $3,000 -$1,000$150 $3,000 10,000 40% 4,000 10% 400 5% 20 $150 $3,000 $0$150 $2,000 10,000 40% 4,000 10% 400 5% 20 $100 $3,000 $1,000$150 $1,000 10,000 40% 4,000 10% 400 5% 20 $50 $3,000 $2,000

Main variableScenario Two 30% opens 7.5% CTR

Profit per customer



RateConversions CPA

Gross Profit

Net Position

$150 $6,000 10,000 30% 3,000 7.5% 225 5% 11 $533 $1,688 -$4,313$150 $5,000 10,000 30% 3,000 7.5% 225 5% 11 $444 $1,688 -$3,313$150 $4,000 10,000 30% 3,000 7.5% 225 5% 11 $356 $1,688 -$2,313$150 $3,000 10,000 30% 3,000 7.5% 225 5% 11 $267 $1,688 -$1,313$150 $2,000 10,000 30% 3,000 7.5% 225 5% 11 $178 $1,688 -$313$150 $1,000 10,000 30% 3,000 7.5% 225 5% 11 $89 $1,688 $688

Main variableScenario Three 15% opens 5% CTR

Profit per customer



RateConversions CPA

Gross Profit

Net Position

$150 $6,000 10,000 15% 1,500 5% 75 5% 4 $1,600 $563 -$5,438$150 $5,000 10,000 15% 1,500 5% 75 5% 4 $1,333 $563 -$4,438$150 $4,000 10,000 15% 1,500 5% 75 5% 4 $1,067 $563 -$3,438$150 $3,000 10,000 15% 1,500 5% 75 5% 4 $800 $563 -$2,438$150 $2,000 10,000 15% 1,500 5% 75 5% 4 $533 $563 -$1,438$150 $1,000 10,000 15% 1,500 5% 75 5% 4 $267 $563 -$438$150 $500 10,000 15% 1,500 5% 75 5% 4 $133 $563 $63$150 $250 10,000 15% 1,500 5% 75 5% 4 $67 $563 $313

Main variable

Critical information



Get the data before commitment • Subscribers• Average open rate• Average CTR

• Feed that data into the spreadsheet along with you profit per customer and conversion rate

If that above preparation doesn’t reap success, you either targeted the wrong audience or you were lied to.


Negotiate harder and be prepared to walk away• Remember, if you’re not making money from your advertising –

there’s no point in doing it• Armed with data, be pessimistic about the success of any potential

email sponsorship… and price accordingly• Pro-tip: Being transparent with publishers about your goals/KPIs can

help if they’re being difficult. If the don’t budget on their price – and it doesn’t seem like a good deal… walk away.


Pro tips for sponsored emails• Split test your creatives & titles• Don’t offer options – focus on getting the user to take the one action

that is most important to your business• Test your emails before sending them out• Get someone else to read the email if you were writing the copy

• Test your emails on different email clients (especially Outlook!)


Questions?


Using Data to always deliver a positive ROI on your paid marketing

Marketing

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