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

From: John Gaskill <jg_at_info-central-usa.com>
Date: Thu 19 Jul 2001 11:12:27 -0500

KELLEY MITCHELL <esc1krm_at_ups.com> WROTE:

>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.

TO WHICH JIM NOVO <jimnovo_at_sprintmail.com> REPLIED:

>Great description of real direct marketing measurement
>technique from Kelley. The final step to complete the
>full direct marketing cycle would be to follow these
>new customers (and visitors if possible) over time.
>Your ROI will change over the next several months as
>customers make repeat purchases and visitors who did
>not convert initially make a first purchase. These
>effects can impact the ending ROI of a campaign, and
>may change your opinion of "best" performance.

Granted, short term ROI is not the same thing as long
term ROI if variables can be sufficiently controlled
and customer behavior can be adequately tracked to
compute meaningful numbers at the close of the
campaign, a month after the campaign, and three or
six months after a campaign.

The importance of these numbers is the simple answer
they provide: If you have to spend $90 to generate $10
in sales, something is out of whack somewhere along
that line.

Why? Because you can't stay in business with those
kinds of numbers.

The beauty and necessity of using the click-through
rate as the primary measurement tool for direct
sellers is the sheer simplicity of the metric. Like
a coupon or order form, you are told where your
 customer came from and what brought him/her there.

The metric does not say the medium is bad. It does not
say the creative is bad. It only says, "This is what
you got!"

If what you got stinks in terms of payoff (ROI) and net
profit, you should be able to see that tweaking or
rethinking the approach, and possibly the medium, is
necessary.

As Claude Hopkins said, "We should learn from those
who sell by mail order because their ads have to more
than pay for themselves." I guess that's why David
Ogilvy and others of similar stature also recommend
learning from direct sellers.

Maybe we can.

Maybe advertisers running banner campaigns should
be checking their click throughs daily and changing
the creative on the fly if it does not work the way they
had hoped or been led to believe.

Regards,

John Gaskill
jg_at_Info-Central-USA.com
Want more advertising for your site?
http://Info-Central-USA.com/site-ads.htm



Received on Thu Jul 19 2001 - 11:12:27 CDT