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Re: Venting (was RE: search vs. content)

From: Carmen Paulino <clpsf_at_mindspring.com>
Date: Tue 10 Jul 2001 10:42:35 -0500

KELLEY MITCHELL <esc1krm_at_ups.com> WROTE:

>My company has an in-house system that tracks each ad
>placement from click-through on, so I am able to
>determine return per placement, per ad. This is the
>most important measurement of performance, as it
>allows me to compute very accurately return on
>investment. . . . Before I make a buy, I consult
>historicals to approximate a CTR and then put the
>proposed buy through my yield model. The model depends
>on these metrics - impressions, cost, clicks, buyers,
>average $/buyer, total $, and ROI. I can change
>elements in the model to make my ROI what I need it
>to be, and that's what I negotiate & plan for.


Kelley Mitchell's post is so good, that it deserves
reposting because Kelley has given a million dollars
worth of online media planning and management advice.

Depending on the advertising objective, my agency adds
a couple of additional elements if available -- the
advertising company's historical leads to sales ratio
and cost. This knowledge, plus factoring in the agency
and creative development costs, allows us to refine
the ROI forecast.

>My point is: I know I have to get a certain amount of
>traffic through the door to make the rest of the model
>work. If I don't get traffic, I can have no conversions.
>Thus, CTR is important to me because it has an impact
>on conversions. Note that I will not keep a campaign
>with a great CTR but low conversions, because of the
>impact on ROI. But if I only get 10 people through the
>door, 9 of them become buyers, then my conversion rate
>is 90% - great, right? Nope, because I spent $5,000
>getting those 9 buyers who spent $10 each = $90. Devise
>your own yield model and revise it as you learn. Don't
>be fooled by agencies telling you a 0.03% is acceptable
>- likely, it is not sufficient to drive the traffic you
>need to gain decent conversions.

Most agencies have the empirical data and resources to
provide clients a series of hypothetical scenarios for
predicted outcomes under certain assumptions. Ask for
them. Fore-armed with *reasonable* benchmarks and
expectations based on experience, an agency or advertiser
can quickly optimize campaigns or cancel them if they are
not satisfying specific goals.

Carmen Paulino



Received on Tue Jul 10 2001 - 10:42:35 CDT


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