Flashcards in iPass Performance Profitabiliy Growth Deck (10):
An advertiser sells an assortment of camera accessories online, and wants to know which of his ad groups give instant profit within a short time frame. Which of these will allow the advertiser to surmise their profit per conversion before any advertising costs?
Average Profit / Maximum CPA
At a glance, you can see that the first ad group is profitable with a cost of $35 for a profit of $15 ($50 - 35). If your campaign is reaching its budget, this ad group is a good candidate for growth.
Which of the following is the correct way to work out ROI?
Revenue from sales, minus advertising costs, all divided by the cost of advertising, multiplied by 100
How does an advertiser calculate ROI
(Revenue - Cost) / Cost
An advertiser wishes to allocate more funds toward a current particular product in a product line. In order to accomplish this goal, the advertiser should:
create a campaign for that product line with a higher daily budget
An advertiser wants to increase his profits on all current keyword traffic. The advertiser is working to a deadline, and only has time to implement one of the following. Which would be the best course of action to achieve this?
Reach profitability > Raise daily budget in small instalments to available traffic as long as is profitable > Test different bid amounts to learn which best optimizes profit
To work out your ad's cost-per-conversion you divide the
total cost by the number of conversions
Cost / Conv.
An advertiser’s primary concern is maximizing profits with his AdWords campaign. What bidding techniques is good to use
Minimize CPA to Maximize ROI
To maximize profit you need to make as many sales as you can by spending as little money as possible. Return on investment (ROI) is king here. The larger you’re ROI, the larger your profit.
To maximize profit you need to make as many sales as you can by
spending as little money as possible. Return on investment (ROI) is king here. The larger you’re ROI, the larger your profit.
A window fitting company is running an AdWords ad about their new range of conservatories. Users who click the ad can submit a form for a free quote, and the form submission is tracked through Conversion Tracking. 20% of the form submissions turn into actual sales, and each sale leads to a further 10% increase in business. Which of the following correctly demonstrates this?
((Average Deal Value) *20%) * 110%
The first thing to identify here is the value to the company for the form submissions. To do this, we take the number of submissions multiplied by the average percentage sales conversion. So in the above example it’s stated that they can convert 20% of form submissions into actual sales. E.g. in 100 form submissions they can expect to convert 20 of them ((Average deal value) * 20%).
But this is not the end of the story, because sales have an additional benefit of generating an additional 10% of sales, from word of mouth. So of the 20 sales we converted, we can expect an additional 2 sales to follow (20 * 10%). Then we add the two parts of the equation together:
((Average deal value) * 20%) + (((Average deal value) * 20%) * 10%)
This is a verbose representation of the equation and can be simplified thus:
((Average deal value) * 20%) * 110%