Predictable paid marketing
Getting sales and leads without losing money.
Today’s outcome• Understanding the key performance metrics of SEM, Display and
Email• Determining what each click is worth• Predicting outcomes for campaign
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What this presentation is NOT about• The mechanisms of SEM, email or display• How to write good copy• How to create effective ads, banners and emails
Even if you’re the worlds most average marketer, understanding and using the right metrics will make you a good marketer.
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Most marketers with a budget are like a kid in a candy store
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Have you ever felt like…Your marketing campaigns spent more money than new revenue generated?
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Something to tweet about…If your marketing is cost effective, you never have to stop it.
…And you’ll never hear the line “You’ll have to cut back on marketing spend, as it’s costing the business too much”
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First rule to successful marketing• Know what a customer is worth, and• Know your average conversion rate by channel
You simply cannot be an effective marketer without knowing those 2 things
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Second rule to successful marketing…• If a dollar spent, doesn’t bring in two (or more).
Don’t spend the dollar.
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Let start with search engine marketing
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Assumptions• You’re targeting the right keywords• You know the value of your custom• You know your average conversion rate for either organic or paid
search
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The most important metric in SEMKey variable• Cost per click
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Yep, that’s it. The single most important metric in SEM is cost per click
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Profit per customer
Searches CPC Position CTR Clicks CostConversion
RateConversions CPA
Gross Profit
Net Position
$150 5,000 $15 1 10.0% 500 $7,500 5% 25 $300 $3,750 -$3,750$150 5,000 $10 2 7.0% 350 $3,500 5% 18 $200 $2,625 -$875$150 5,000 $8 3 5.0% 250 $2,000 5% 13 $160 $1,875 -$125$150 5,000 $6 4 3.5% 175 $1,050 5% 9 $120 $1,313 $263$150 5,000 $3 5 2.5% 125 $375 5% 6 $60 $938 $563$150 5,000 $2.5 6 2.0% 100 $250 5% 5 $50 $750 $500$150 5,000 $2.0 7 1.5% 75 $150 5% 4 $40 $563 $413
Main variable Flow on effect
Simplified SEM possibilities chart
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Wow, look at that Batman, the most profitable spot is where you’d least expect it
But Google suggests a first page bid of…• Forget what Google suggests you bid… Do your own maths and see
what’s the sweet spot for you
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SEM Pro tips• Split test your ad creatives• Know if people purchase or become leads on mobile or desktop or both
• Then apply the math regarding costs/conversions
• Use the following ad extensions (to consume more real estate and achieve higher CTR):• Call outs• Site links• Telephone
• Use {KeyWord} insertion. It totally makes every ad relevant!• Add negative keywords… If you products aren’t free, don’t bid on keywords
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Let’s move on to display advertising
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Assumptions• You’re targeting is right, irrespective of whether it’s• Remarketing• Placements• In-market segments• Email list upload, etc..
• You know the value of your customers• You know your display marketing’s average conversion rate… (If you
don’t, take your website crappiest performing channel – and assume it’s around that)
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60% of mobile banners ads are clicked by accident
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The most important metric in display advertisingKey variable• Cost per click
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The less you pay, the more you reap
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Profit per customer
CPC Clicks CostConversion
RateConversions CPA
Gross Profit
Net Position
$150 $10 500 $5,000 2% 10 $500 $1,500 -$3,500$150 $7 500 $3,500 2% 10 $350 $1,500 -$2,000$150 $5 500 $2,500 2% 10 $250 $1,500 -$1,000$150 $1 500 $500 2% 10 $50 $1,500 $1,000$150 $0.50 500 $250 2% 10 $25 $1,500 $1,250$150 $0.25 500 $125 2% 10 $13 $1,500 $1,375$150 $0.10 500 $50 2% 10 $5 $1,500 $1,450
Main variable Flow on effect
Display pro tips• Split test your ad creatives• Implement impression caps• Try the different segmenting options (Google, Facebook and LinkedIn
offer many powerful segmentation tools• Upload your leads database into Facebook or Google, and then
remarket to them• Double-pro tip. Segment your database.
• View my slideshare on Customer Journey Optimization (pro placement marketing)
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Let’s move on to sponsored email marketing
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Assumptions• You’re targeting the right audience• Targeting the right audience via email can convert as well as any of your other
best performing channels or campaigns
• You know the value of your customers• You know your average conversion rate for any well targeted audience
and not so well targeted audiences (because not all email lists are made equal)
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Most important metrics in sponsored email marketingKey variable• Price of sponsorshipCritical information (need to know)• Number of subscribers• Average open rate• Average click through rate
The critical information determines what you should pay sponsorship
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A marketer just paid what’s on the rate card to these publisher
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In this example:
• Subscribers, profit per customer and conversion rates are static• But we play around
with:- Cost- Open rates- CTR
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Scenario One 40% opens 10% CTRProfit per customer
Cost of Sponsorship SubscribersOpen Rate
Opens CTR ClicksConversion
RateConversions CPA
Gross Profit
Net Position
$150 $6,000 10,000 40% 4,000 10% 400 5% 20 $300 $3,000 -$3,000$150 $5,000 10,000 40% 4,000 10% 400 5% 20 $250 $3,000 -$2,000$150 $4,000 10,000 40% 4,000 10% 400 5% 20 $200 $3,000 -$1,000$150 $3,000 10,000 40% 4,000 10% 400 5% 20 $150 $3,000 $0$150 $2,000 10,000 40% 4,000 10% 400 5% 20 $100 $3,000 $1,000$150 $1,000 10,000 40% 4,000 10% 400 5% 20 $50 $3,000 $2,000
Main variableScenario Two 30% opens 7.5% CTR
Profit per customer
Cost of Sponsorship SubscribersOpen Rate
Opens CTR ClicksConversion
RateConversions CPA
Gross Profit
Net Position
$150 $6,000 10,000 30% 3,000 7.5% 225 5% 11 $533 $1,688 -$4,313$150 $5,000 10,000 30% 3,000 7.5% 225 5% 11 $444 $1,688 -$3,313$150 $4,000 10,000 30% 3,000 7.5% 225 5% 11 $356 $1,688 -$2,313$150 $3,000 10,000 30% 3,000 7.5% 225 5% 11 $267 $1,688 -$1,313$150 $2,000 10,000 30% 3,000 7.5% 225 5% 11 $178 $1,688 -$313$150 $1,000 10,000 30% 3,000 7.5% 225 5% 11 $89 $1,688 $688
Main variableScenario Three 15% opens 5% CTR
Profit per customer
Cost of Sponsorship SubscribersOpen Rate
Opens CTR ClicksConversion
RateConversions CPA
Gross Profit
Net Position
$150 $6,000 10,000 15% 1,500 5% 75 5% 4 $1,600 $563 -$5,438$150 $5,000 10,000 15% 1,500 5% 75 5% 4 $1,333 $563 -$4,438$150 $4,000 10,000 15% 1,500 5% 75 5% 4 $1,067 $563 -$3,438$150 $3,000 10,000 15% 1,500 5% 75 5% 4 $800 $563 -$2,438$150 $2,000 10,000 15% 1,500 5% 75 5% 4 $533 $563 -$1,438$150 $1,000 10,000 15% 1,500 5% 75 5% 4 $267 $563 -$438$150 $500 10,000 15% 1,500 5% 75 5% 4 $133 $563 $63$150 $250 10,000 15% 1,500 5% 75 5% 4 $67 $563 $313
Main variable
Critical information
Critical information
Critical information
Get the data before commitment • Subscribers• Average open rate• Average CTR
• Feed that data into the spreadsheet along with you profit per customer and conversion rate
If that above preparation doesn’t reap success, you either targeted the wrong audience or you were lied to.
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Negotiate harder and be prepared to walk away• Remember, if you’re not making money from your advertising –
there’s no point in doing it• Armed with data, be pessimistic about the success of any potential
email sponsorship… and price accordingly• Pro-tip: Being transparent with publishers about your goals/KPIs can
help if they’re being difficult. If the don’t budget on their price – and it doesn’t seem like a good deal… walk away.
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Pro tips for sponsored emails• Split test your creatives & titles• Don’t offer options – focus on getting the user to take the one action
that is most important to your business• Test your emails before sending them out• Get someone else to read the email if you were writing the copy
• Test your emails on different email clients (especially Outlook!)
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Questions?
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