Forecast Search Conversions

August 2, 2009

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How to forecast online conversions

Diminishing Returns Analysis - Smart Digital Spending

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

Diminishing Returns written example 2

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.

diminishing returns video

diminishing returns video

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

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