With a properly connected Google AdWords account sending data into Google Analytics, establishing ROI for e-commerce websites is a breeze!
Simply navigate to the AdWords clicks report, send a report with the provided ROI number and you are golden, right?
Hold up!
You are having a case of TBAGD (tool blindness and Google dependence), and you are not alone. I had a wicked case of TBAGD once, but now I have kicked the habit and formed a support group. Our first meeting is this Saturday.
Attendees will learn how to calculate the true ROI for their paid media activities, understand important data that needs to be collected outside of Google Analytics, and where to find the goods. The result? Effective end-to-end measurement and a cure for TBAG.
An informal poll shows that 9 out of 10 executives recommend TBAGD support to their analysts and marketing folks, with the 10th simply asking “What is the Internet?”
Jeff Sauer
2. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Your Guide
2
Jeff
Sauer
Marketer
and
Entrepreneur
Jeffaly.cs
and
Knowledge
Land
Minneapolis,
MN,
USA
google.com/+JeffSauer
knowledge.land
9. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
ROI Does Not Stand For:
• Regal
or
Idiot
• Roided
Out
Imbecile
• Randy
‘Ol
Ins.gator
• Rager
on
Ibiza
11. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Return On Investment
How
Much
Money
Did
We
Spend?
Investment
12. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Return On Investment
How
Much
Money
Did
We
Spend?
How
Much
Money
Did
We
Make?
Investment
Return
36. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
How ROI Should Really Be Calculated
Revenue
37. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Subtract Our Ad Spend
Revenue
Adver.sing
Investment
38. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Subtract Cost of Selling Each Product
Revenue
Adver.sing
Investment
Product
Cost
39. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Subtract Fixed Costs of Business
Revenue
Adver.sing
Investment
Product
Cost
Fixed
Costs
40. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Now You Have Net Profit
Revenue
Adver.sing
Investment
Product
Cost
Fixed
Costs
Net
Profit
41. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Here’s an ROI Equation to Use
Gain
From
Investment
(Net
Profit)
Cost
of
Investment
Cost
of
Investment
ROI
42. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Pulling It All Together
Revenue
$82,730
100%
43. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Pulling It All Together
Revenue
$82,730
100%
Ad
Spend
$10,942
-‐
44. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Pulling It All Together
Revenue
$82,730
100%
Ad
Spend
$10,942
-‐
Return
on
Ad
Spend
$71,788
656%
AKA
ROI
in
AdWords
45. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Pulling It All Together
Revenue
$82,730
100%
Ad
Spend
$10,942
-‐
Return
on
Ad
Spend
$71,788
656%
Cost
of
Goods
Sold
$62,021
75%
46. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Pulling It All Together
Revenue
$82,730
100%
Ad
Spend
$10,942
-‐
Return
on
Ad
Spend
$71,788
656%
Cost
of
Goods
Sold
$62,021
75%
Gross
Revenue
$9,767
12%
47. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Pulling It All Together
Revenue
$82,730
100%
Ad
Spend
$10,942
-‐
Return
on
Ad
Spend
$71,788
656%
Cost
of
Goods
Sold
$62,021
75%
Gross
Revenue
$9,767
12%
Total
Fixed
Costs
$5,000
6%
48. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Pulling It All Together
Revenue
$82,730
100%
Ad
Spend
$10,942
-‐
Return
on
Ad
Spend
$71,788
656%
Cost
of
Goods
Sold
$62,021
75%
Gross
Revenue
$9,767
12%
Total
Fixed
Costs
$5,000
6%
Net
Profit
$4,767
6%
49. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Pulling It All Together
Revenue
$82,730
100%
Ad
Spend
$10,942
-‐
Return
on
Ad
Spend
$71,788
656%
Cost
of
Goods
Sold
$62,021
75%
Gross
Revenue
$9,767
12%
Total
Fixed
Costs
$5,000
6%
Net
Profit
$4,767
6%
True
ROI
44%
52. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Future Purchases = No Ad Spend?
Assume
No
Future
Spend
53. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
Future Purchases = No Ad Spend?
Assume
No
Future
Spend
AND
Customer
Has
1.5
Life.me
Purchases
54. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
We Find the True ROI of our Efforts
Revenue
$124,095
100%
Ad
Spend
$10,942
-‐
Return
on
Ad
Spend
$113,153
1034%
Cost
of
Goods
Sold
$93,031
75%
Gross
Revenue
$20,122
16%
Total
Fixed
Costs
$5,000
6%
Net
Profit
$15,122
18%
True
ROI
138%
55. Jeff
Sauer
|
@jeffaly.cs
|
#measurecamp|
True
AdWords
ROI
Repor.ng
We Have Cured Measure Blindness!