true roi measurement in google analytics
DESCRIPTION
With a properly connected Google AdWords account sending data into Google Analytics, establishing ROI for e-commerce websites is a breeze! Simply navigate to the AdWords clicks report, send a report with the provided ROI number and you are golden, right? Hold up! You are having a case of TBAGD (tool blindness and Google dependence), and you are not alone. I had a wicked case of TBAGD once, but now I have kicked the habit and formed a support group. Our first meeting is this Saturday. Attendees will learn how to calculate the true ROI for their paid media activities, understand important data that needs to be collected outside of Google Analytics, and where to find the goods. The result? Effective end-to-end measurement and a cure for TBAG. An informal poll shows that 9 out of 10 executives recommend TBAGD support to their analysts and marketing folks, with the 10th simply asking “What is the Internet?” Jeff SauerTRANSCRIPT
True AdWords ROI Measurement For E-Commerce Websites
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Your Guide
2
Jeff Sauer Marketer and Entrepreneur Jeffaly.cs and Knowledge Land Minneapolis, MN, USA google.com/+JeffSauer knowledge.land
Do You Have TBAGD?
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
What is TBAGD?
Tool Blindness
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
What is TBAGD?
Tool Blindness
Google Dependency
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
What is Tool Blindness?
Photo Credit: mirror.co.uk
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
What is Google Dependency?
Let’s Talk About ROI
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
ROI Does Not Stand For:
• Regal or Idiot • Roided Out Imbecile • Randy ‘Ol Ins.gator • Rager on Ibiza
Return on Investment
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Return On Investment
How Much Money Did We Spend?
Investment
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Return On Investment
How Much Money Did We Spend?
How Much Money Did We Make?
Investment Return
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Yet We Send Reports Like
This
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
ROI According to Google Analytics
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
And We Think To Ourselves
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
But Executives Think of Us Like This
It’s Not Your Fault
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
It’s Not Your Fault
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
It’s Not Your Fault
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
It’s Not Your Fault
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
You Simply Have a Case of TBAGD
Tool Blindness
Google Dependency
Time to Evolve
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Evolution of Man
Photo Credit: wallpapersus.com
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Since We’re an Un-Conference
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Let’s Remove the Google Goggles
Let’s Remove the Beer Goggles
Sidebar: Google Image
Search for Ugly to Pretty
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Ugly to Pretty = Goldmine
ROI in Google Analytics
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
This is ROI in a Vacuum
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
ROI by Very Definition, That’s All
By Defini.on, This is Return on Investment
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Investment and Revenue Are Important
Investment
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
But… We Forgot About Profit
We Forgot About Dre Profit
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
We’re Still Far From Supermodels
Finding Your True ROI
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
How ROI Should Really Be Calculated
Revenue
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Subtract Our Ad Spend
Revenue
Adver.sing Investment
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Subtract Cost of Selling Each Product
Revenue
Adver.sing Investment
Product Cost
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Subtract Fixed Costs of Business
Revenue
Adver.sing Investment
Product Cost
Fixed Costs
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Now You Have Net Profit
Revenue
Adver.sing Investment
Product Cost
Fixed Costs
Net Profit
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Here’s an ROI Equation to Use
Gain From Investment (Net Profit)
Cost of Investment
Cost of Investment
ROI
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Pulling It All Together
Revenue $82,730 100%
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Pulling It All Together
Revenue $82,730 100% Ad Spend $10,942 -‐
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Pulling It All Together
Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656%
AKA ROI in AdWords
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Pulling It All Together
Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75%
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Pulling It All Together
Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75% Gross Revenue $9,767 12%
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Pulling It All Together
Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75% Gross Revenue $9,767 12% Total Fixed Costs $5,000 6%
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Pulling It All Together
Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75% Gross Revenue $9,767 12% Total Fixed Costs $5,000 6% Net Profit $4,767 6%
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Pulling It All Together
Revenue $82,730 100% Ad Spend $10,942 -‐ Return on Ad Spend $71,788 656% Cost of Goods Sold $62,021 75% Gross Revenue $9,767 12% Total Fixed Costs $5,000 6% Net Profit $4,767 6% True ROI 44%
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
We’re Getting Closer
Incorporating Lifetime Value
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Future Purchases = No Ad Spend?
Assume No Future Spend
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Future Purchases = No Ad Spend?
Assume No Future Spend
AND
Customer Has 1.5 Life.me Purchases
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
We Find the True ROI of our Efforts
Revenue $124,095 100% Ad Spend $10,942 -‐
Return on Ad Spend $113,153 1034%
Cost of Goods Sold $93,031 75% Gross Revenue $20,122 16%
Total Fixed Costs $5,000 6% Net Profit $15,122 18% True ROI 138%
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
We Have Cured Measure Blindness!
Thank You, Old Chap!
Source: hkps://answers.yahoo.com/ques.on/index?qid=20080201184249AAHqd5l
Jeff Sauer | @jeffaly.cs | #measurecamp| True AdWords ROI Repor.ng
Jeff Sauer Marketer and Entrepreneur Jeffaly.cs and Knowledge Land Minneapolis, MN, USA google.com/+JeffSauer knowledge.land
Thank You!
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