Forecasting online sales is quite easy if there is historical data available. If all of sudden you were given extra budget for your search or online display campaign, performing a diminishing returns model will help predict the amount of conversions you can expect to generate with this increased budget. Likewise, if you have to cut online spend, a diminishing returns model will show you the expected conversion volume loss as a result.

Let’s suppose we want to predict the increase in search conversions (dependent variable) based on an increase in paid search spend (independent variable). Would we use a linear or logarithmic-scale to determine our forecast equation?

To view and download free step-by-step instructions on how to predict online sales, go to Smart Digital Spending.com.

How to perform a Diminishing Returns Model..

Creating a Diminishing Returns Model is quite easy if there is historical data available. If all of sudden you were given extra budget for your advertising campaign, performing a diminishing returns model will help predict the amount of sales you can expect to generate with this increased budget. Likewise, if you have to cut advertising spend, a diminishing returns model will show you the expected sales volume loss as a result.

The free step-by-step tutorial on how to perform a Diminishing Returns Model can be downloaded here.

What is the maximum weekly or monthly amount you can spend in order to maintain your cost per acquisition goal? Learn how to predict online orders using the free step-by-step tutorial provided.

Creating a diminishing returns model will allow you to determine the maximum level of weekly spend allocation to maintain the cost-per-acquisition goal for either the online display media channel, paid search channel, or both. It can also be used to determine the essential trade-off between sales order volume and cost-per-acquisition efficiency. Most importantly, it can help you predict online orders.

How to forecast online conversions

Diminishing Returns Analysis - Smart Digital Spending

Forecasting online conversions is quite easy if there is historical data available. If all of sudden you were given extra budget for your search or online display campaign, performing a diminishing returns model will help predict the amount of conversions you can expect to generate with this increased budget. Likewise, if you have to cut online spend, a diminishing returns model will show you the expected conversion volume loss as a result.

Let’s suppose we want to predict the increase in search conversions (dependent variable) based on an increase in paid search spend (independent variable). Would we use a linear or logarithmic-scale to determine our forecast equation?

Diminishing Returns written example

Diminishing Returns written example 2

The Optimal Spend tutorial explains step-by-step how to forecast online conversions. Written, audio and video instructions so easy to follow a caveman can do it! Also included is an Excel file with sample data based on a real-world case. 7 pages of written instructions and 11 minutes of video will take you from start to finish on how to construct a diminishing returns model. Helpful for when your client wants to know what is the maximum spend you can spend in order to maintain a cost-per-acquisition goal or forecast online conversions.

Smart Digital Spending is the FIRST company to provide agencies and online marketing professionals with written, audio and video tutorials on how to use data analysis to enhance campaign performance.

If you have any comments or thoughts, please share. Thanks.

Eric melchor

Follow us on Twitter!

Facebook Us!