Strict ROI may not be the best measure. ROI is best used when there is
a direct connection between an expense and a result - we spent X and the
result was an increase in revenue or productivity of Y. Many web based
businesses have used ROI incorrectly and failed to use other better
measures. ROI on most web business cannot accurately measure the return
from a visitor who visits the site today and then returns in 2 months to
make a purchase.
My suggestion, and I have done this many times for many clients, is to
measure the conversion rate that accounts for all "actions" that you
want them to take. An "action" could be a purchase, signing up for a
newsletter or requesting more information. Anything that gets you
information about the visitor that can be used for future "touches." A
solid lead is not as good as a sale but it is better than someone just
going away.
So, you could then measure the conversion rate by specific keywords and
or by source. Then you could concentrate on the words and sources that
have the highest conversion rates. For example, the visitors from
Google and keyword abc had a conversion rate of 6% which is 2% higher
than all others. So, spend more money focused on keyword abc on Google
and other traffic drivers. Using conversion rates and other measures
will give you a more holistic look at the site and the advertising.
And be sure to do follow up marketing to everyone who took an action on
the site. They have expressed an interest in your product and all they
might need is a gentle nudge.
Hope this helps.
Jost Lunstroth
www.lunstroth.com
Received on Mon Jun 02 2003 - 18:59:53 CDT
