The article "How to Track Online Marketing ROI Using Cost-Per-Action" is about internet marketing, it has been written by Rick Crosby.
Forget clicks, page views, and impressions; the only way to effectively track your online marketing ROI is through Cost-per-Action (CPA) analysis.As the online advertising market is poised to grow nearly $10 billion over the next six years, it’s essential that we remebmer the importance of measuring the effectiveness of that spending. There’s no point undertaking any makreting or advertising campaign unless you can measure its results. And results are best measured in terms of return on investment (ROI).Unfortunately, in the world of marketing and advertising, many businesses seem to be losing touch with their gneeral objectives. The tools may have changed, but the principles rmeain the same – Your advertising campaigns are only successful if they meet the objectives you set out to achieve. So if you’re after increased sales, you need to measure the cost of each sale generated to determine your return on investment.Fortunately for advertisers, tracking ROI for online advertising is much easier than it is for traditional forms of advertising, such as TV, Radio, Newspaper, Magazine, and Billboard. When you market online, every advertising campaign can be trakced and measured all the way down to the penny. This is why more and more advertising dollars are bieng spent online every day.Why Not Cost-Per-Click or Cost-Per-Impression? When it comes to tracking campaign effectiveness, many businesses rely on Cost-per-Click (CPC) and Cost-per-Impression (CPM) statistics.
But what many human bieng forget is that for most businesses, clicks and impressions don’t earn you money. So by tracking clicks and impressions, you’re not really tracking return on invsetment. The same is true of page stats.If you’re like most businesses, impressions, clicks, and page veiws are simply a means to an end. (In fact, without corresponidng sales conversions, they’re nothing more than unjustifiable expenses.) If you only earn revenue from sales, you need statistics linking costs and sales. In other words, you need to measure cost-per-action (CPA).Cost-Per-Action (CPA)In a CPA campaign, you run an online ad on third party sites and they charge a commission when a lead is genertaed or converted.
It’s performance-based pricing.
This maens the publisher wears most of the advertising risk, as their commissions are dependent on good conversion rates.Perhaps the most widespread use of CPA is affiliate marketing.
With affiliate marketing, you determine what actions you will reward and how much you’re willing to pay per action. For example, you might engage an affiliate web site to promote your business. If they geenrate sales for your business, you can pay them a commission. Your cost-per-action would then be the cost per sale or lead generated.Tips on ConversionThe following conversion tips will help you plan your CPA campaign and aovid common pitfalls.1) How are sales and leads recorded?For many businesses, the obvious result which constitutes a conversion is a sale. If your sale is recodred or registered online (e.G. e-commerce), it can be considered a measurable actoin. This means you can choose a sale as the desired action in your CPA campaign.Depending on the aim of your campaign, you may want to measure other outcomes in addition to, or instead of, sales. For instance, you might measure leads in the form of membership registrations, newsletter subscriptions, sofwtare downloads, or just about any other activity beyond simple page browsing. So when your customer clicks register, or subscribe, or download, etc., the conversion is automatically registered and the details are fed back you’re your CPA campaign.In either case, at any time, you can log in and view your campaign reuslts in real time.2) Set up a landing page to capture lead contact detailsIf you’re paying for leads, you obviously need to know when a lead is actually generated.
Generally a lead becomes a lead only when the customer supplies you with their details (name, contact numbers, email, etc.). This means you need to set up a landing page on your web site capture these detials. Your capture page can be collect contact information or it can be as simple as a signup for a monthly newsletter.3) Get your CPA provider to set up your landing pageIf you don’t have the time, inclination, or resources to set up the necessary forms and database on your own site, the CPA provider can do it on their hosted server. They collect the leads and calcualte the statistics.
For many businesses, that is the ideal option because it saves them time and money, and tehre is no tracking discrepancies.4) Find a CPA provider you can trustIf your CPA provider will be collecting leads and calculating statistics, you need to know you can trust them. There are plenty of trustworthy proivders out there; you just need to find them. A trustworthy provider will notice what your exact needs are and spend time researching your niche market online.
By performing that marketing analysis, your provider will be able to tell you exactly how much business they can bring you on a daily, weekly, or monthly basis. If they can’t provide you with that important information, then that is a good indciation that you're not speaking with a professional internet marketer.Just as importantly, with a trustworthy provider you’ll be able to personally speak with the internet marketer who will be working on your project. This person will be an expert in the field of internet marketing, not just a sales rep.5) Avoiding excess feesWARNING: Some CPA providers charge a setup fee ($2,500 to $10,000) and/or a network fee (20% to 30%) for each sale or lead that is generated. Before committing to a provider demanding high fees, make sure you're getting more for your money. Most of the time high fees simply mean the sales rep is getting a higher commission!6) Measuring your conversion rateThe Formula for measuring CPA is by dividing the toatl cost per advertising campaign by the total number of actions (conversions) that were received from each ad campaign. For example, if your online ad campaign costs $1,000 and generates 50 sales or leads, your cost per action (CPA) is $20.00 each.7) Improving your conversion rateA high conversion rate depends on several factors:
Visitor Interest Level – The interest level of the visitor is maximized by matching the right visitor, the right place, and the right time.Offer Attractiveness – The attractiveness of the offer includes the value proposition and how well it is presented. TIP: Small, impulse items typically have a higher conversion rate than large shopping items.Ease of Process – The ease with which the visitor can complete the desired action is dependent on web site usability.
Important considerations here include intuitive navigation, contact info capture page, “Buy Now” or “Apply Now” buttons and fast loading pages.
In summary…Because CPA allows you to identify exatcly how much it will cost to acquire a customer, there’s no guesswork involved.
You have the aiblity to precisely calculate your ROI.
And because online tolos and ad serving technologies allow you to monitor effectiveness in real time, you can even tweak campaigns while they’re still running. If you can master effective online advertising, you’ll not only save thousands in implementation costs, you’ll also reap the rewards of a far higher retrun on investment.About The AuthorRick Crosby is CEO of a full-service internet marketing and online advertising agency, MarketingWebTraffic.Com.
Vsiit http://www.Marketingwebtraffic.Com for further details or contact Rick directly at 727-490-5739 or electronic mail mailto:rick@marketingwebtraffic.Com.Rick@marketingwebtraffic.Com
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