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?
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.
Is there a way to optimize a SEM campaign without using Google Analytics or Adword tools?
Google Adwords, Yahoo and MSN provide some cool tools that show you how to optimize your SEM campaign. You can set up your search ads to show during certain days of the week, time of day and regions. If you have the time to play with all these tools, that is great. However, if you are looking for an easy and effective way to optimize a search campaign without wasting hours diving into these tools, you should perform a volume/efficiency keyword analysis.
Performing a Volume/Efficiency Matrix can save you hundreds or even thousands of dollars in your paid search campaign. A volume/efficiency analysis will tell you whether certain keywords are performing poorly in efficiency and volume in relation to other keywords.
So how do we perform this analysis?
All that is required is a basic keyword report from your search engine that shows name of keyword, clicks and spend. By following along with the free tutorial that can be downloaded here, I will show you step-by-step how to set up a volume/efficiency keyword analysis.
The best part about performing a Volume / Efficiency Matrix is the findings. This analysis will give you a rough estimate on how much money you would save if you were to remove a certain group of keywords and show you how much click activity would be lost. It is a fantastic way to optimize a search campaign on an ad hoc, quarterly, semi-annual, or yearly basis. More importantly, your clients will be pleased that you are monitoring their search campaign wisely.
Who else wants to start evaluating publishers beyond CTR and CPC? The best Online Marketing Metric – ‘Cost-per-weighted-point’.
Discover which publishers are driving people to key pages on your website with the Cost-per-weight metric. I consider this the best online metric as it’s so simple to implement and will allow you to make smarter media planning decisions which will increase your online display ROI and make your client happy.
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.
Do you have to cut paid search spend? If so, here is an effective way to decrease spend without sacrificing too much return by performing a paid search position test.
Reduce paid search spend by 40% and only lose 18% in click volume? Is that possible?
The goal of performing a paid search position test is to analyze core keyword performance in position 1 versus lower positions 2-5 based on total click volume and CPC efficiency in your paid search engine. If you have to reduce paid search budget, this is an effective way to optimize.
Regardless of whatever ‘Call to Action’ you use to try and influence sales on your website, there is probably one that statistically works better than others. Find out which Call to Action performs better using the Call to Action Analysis.