1. May the Ratio Be With You
1% CTR
10% conversion
1,000 impressions
10 clicks
1 purchase
(CPM)
(CPC)
$20 avg ticket, 5%
(CPA)
-1-
$1 rev share
Augustine Fou

2. Real-world CTR Test
Click through rates from Adwords ad to product page
Logitech S150 USB Speakers
- 2.28% click through rate
- price point: $12
SSD Ultimate Boot Drive
- 0.62% click through rate
- price point: $250 - $400
Fujifilm Finepix F70EXR
Digital camera
- 0.92% click through rate
- price point: $200
Samsung Ultrathin Bezel LCD
HDTV
- 0.54% click through rate
- price point: $1,999
-2-
Augustine Fou

3. Conversions to Sales
Conversion ratios from clicks to sales, including dollars
Q1 2012 - $208.43
Ordered items: 137
Clicks: 29695
Conversion: 0.46%
Q4 2011 - $414.40
Ordered items: 251
Clicks: 29833
Conversion: 0.84%
-3-
Q3 2011 - $627.61
Ordered items: 414
Clicks: 37801
Conversion: 1.10%
Q2 2011 - $801.25
Ordered items: 510
Clicks: 63878
Conversion: 0.80%
Augustine Fou

4. More realistic ratios
from ongoing real-world test since 2007
1% CTR
1% conversion
10,000 impressions
100 clicks
1 purchase
(CPM)
(CPC)
$20 avg ticket, 5%
(CPA)
-4-
$1 rev share
Augustine Fou

5. So What?
“In my real-world experiments, run continuously since
2007, CTRs of around 1% are reasonable and
conversion ratios of 1% are observed. This means it
takes 10,000 impressions to drive 1 sale. Depending on
the average ticket and average revenue share, it
remains very hard to break even. Advertisers would do
better to pay only on acquisition/sale – that is the
ultimate performance-based advertising.”
- Dr. Augustine Fou
-5-
Augustine Fou

6. Dr. Augustine Fou – Chief Digital Strategist
“I advise clients on optimizing
marketing tactics to achieve
greatest ROI and business
impact.”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
ClickZ Articles: http://www.clickz.com/author/1151/augustine-fou
Slideshares: http://www.slideshare.net/augustinefou
LinkedIn: http://www.linkedin.com/in/augustinefou
@acfou
Augustine Fou

7. APPENDIX
December 4, 2012.

8. Airbnb Conversion Funnel
Source: Compete Millward Brown
December 4, 2012.

9. Booking.com Conversion
Source: Compete Millward Brown
December 4, 2012.

10. Hotels.com Conversion
Source: Compete Millward Brown
December 4, 2012.