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
