Re: Venting (was RE: search vs. content)
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.
Received on Tue Jul 10 2001 - 10:42:35 CDT
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