Marketing Crash Course

ROAs formula

(Ad revenue / Ad Spend) X100

ROI formula

(Revenue - cost) / Costs X 100

KPI

A value that you can accurately measure to show progress

What is your main Marketing KPI?:

- Revenue & Profit - Customer Lifetime Value - Phone Calls - Contacts - Sales - Social Media Following - Total Website Traffic - Appointment Bookings - Downloads - Cost Per Lead/Sale - Organic Traffic - Social Traffic

How to Track Advertising and Marketing KPIs?:

- Track 1 major KPI beyond revenue and costs - Use monthly or quarterly data - Use the same data so your KPIs are accurate - Understand factors that lead to growth or decline - Use KPI data for future marketing strategies

ROAS definition

Ad Revenue earned Based on total Advertising spend

Is my CPC Too High? Campaign Cost: $750 Conversion Rate: 3% Average Order Value: $50 1,000 Clicks = 30 sales 30 sales * $50= $1,500 Revenue ROAS= 1,500/750 = 2*100+ 200%

Approximately $1.50 CPC. However, It varies by industry and ad network.

CPC Definition:

Average Cost per Ad Click

CTR Definition

Average Rate of Clicks Per Impression

CTR Formula

CTR=(Clicks/Impressions)x100

CTR acronym

Click Through Rate

CPC acronym

Cost Per Click

CPO=

Cost per Order

What is the Average CTR?:

Estimates: ~ 2% for Search Ads ~ 0.5-1.0% for Display/Social Ads

Key Performance Indicators Example: A marathon runner is training by running 10 miles every other day for 2 weeks. The runner wants to beat their running pace of 10 minutes/mile. What is the KPI?

KPI= Running pace Since they are trying to get their KPI under 10 minutes a mile a good KPI would be 9 minutes and 59 seconds > or lower To calculate it would be total minutes ran divided the ten minutes Minutes/mile

Key Performance Indicators Example: A Dentistry is running ads to drive more monthly leads including phone calls, appointment bookings, and contact form sends. What is the KPI?

KPI= Total leads per month.

KPI (acronym)

Key Performance Indicator

Conversion rate

Orders/ clicks

Ad Revenue: $20,000 Ad Spend: $10,000 ROAS=

ROAS: 200%

ROI example Revenue: $20,000 Cost: $15,000 ROI=

ROI= 33.3%

ROAS Acronym

Return on Ad Spend

ROI definition

Return on Investment

CPC Formula:

Total Cost divided by Total Clicks. Cost/Clicks = Cost Per Click.

CPO Formula

Total cost of Advertising/ Number of Orders