In general, you are more then right! This is how you should approach ppc...
Personally though, I test campaigns for 1-2 days and if they not doing well, I move on to other campaigns who will be (more) profitable. Again, that's how I approach things.
1 month, $10,000 profit all ppc challenge
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In general, you are more then right! This is how you should approach ppc...
Personally though, I test campaigns for 1-2 days and if they not doing well, I move on to other campaigns who will be (more) profitable. Again, that's how I approach things.
Can we check those calculations again? Maybe I'm figuring this wrong, but if your average payout is $83, and you are converting at 1.33%, then that new bid of $1.11 would not give you a 100% ROI - it would be your break-even point.
Now, on a bid of $.55 for 75 clicks, that's a spend of 41.25 and a profit of 83 - that's your 100% ROI...
No. If you invest $50, and your return is $50, (revenue $50, profit 0). Your return on investment (ROI) is 100% of your investment. Which is the same thing as break even.
Sorry, but that's wrong. Return is profit. 100% ROI means that you've doubled your money.
from:
Rate of return - Wikipedia, the free encyclopedia
Just a bit of hairsplitting on my side, since you actually understand how it works, but still, the definition just says something else.
Yeah, I'm not splitting hairs on definitions either - I'm assuming bejeebers is not trying to break even since the name of the thread is "10,000 profit" Not "spend 10,000 and hope I break even". Just wanted to make sure he wasn't using the same calculation on his own spreadsheet, or this whole thread will be a sad, but funny one at the end of the month...
Agreed.
Profit = Revenue - Expense
ROI = Revenue / Expense
If your ROI is 100%, you doubled your money spent.
One slight change to that:
ROI = Profit / Expense
But you're right if you hit 100%, you have doubled your money. Which is my goal with this whole thing.
Not much has happened to talk about, just adding more keywords, testing some new adcopy and deleting crap. Plus I did make a slight change to my landing page adding in an example of how the process works to make it crystal clear. I'll see how that turns out...
Here's the numbers, getting there:
I just finished increasing all my bids for adwords. That should get alot more clicks. I also just changed my ads a bit so we'll see how that does.
I think I may have gone a bit too low to start with them, I am getting some clicks but not a high enough volume for my liking.
I think I may have gone a bit too low to start with them, I am getting some clicks but not a high enough volume for my liking.
I hear different opinions all the time...
By ROI 100% I mean you spend $1 and get back $2!
If you spend $1 and get back the same amount of revenue $1, then ROI is 0%. You should go for at least ROI 100%, then you do well. ROI 50% can be still acceptable depending on offers and other factors!
ROI means return on investment.
If you spend $1 and get back $1 you broke even. (ROI is 0%)
If you spend $1 and get back $2 you doubled your money. (ROI is 100%)
The calculation is:
Profit = Revenue - Expense
So,
Profit = $2 - $1
Profit = $1
ROI% = (Profit/Expense) x 100
ROI% = ($1/$1) x 100
ROI% = (1) x 100
ROI% = 100%
Say we want to figure out what kind of expense we can have if we know we want a certain ROI:
For example: Target ROI 134%
Expense = 1/Target ROI
Expense = 1/1.34
Expense = 0.75 *rounded off
So we know we can spend $0.75 to get an ROI of 134% in this case.
Check:
ROI% = (Profit/Expense) x 100
ROI% = (1/0.75) x 100
ROI% = 133.33 *off a bit due to rounding
So that's your math lesson for today kiddies. Now go make some money.
If you spend $1 and get back $1 you broke even. (ROI is 0%)
If you spend $1 and get back $2 you doubled your money. (ROI is 100%)
The calculation is:
Profit = Revenue - Expense
So,
Profit = $2 - $1
Profit = $1
ROI% = (Profit/Expense) x 100
ROI% = ($1/$1) x 100
ROI% = (1) x 100
ROI% = 100%
Say we want to figure out what kind of expense we can have if we know we want a certain ROI:
For example: Target ROI 134%
Expense = 1/Target ROI
Expense = 1/1.34
Expense = 0.75 *rounded off
So we know we can spend $0.75 to get an ROI of 134% in this case.
Check:
ROI% = (Profit/Expense) x 100
ROI% = (1/0.75) x 100
ROI% = 133.33 *off a bit due to rounding
So that's your math lesson for today kiddies. Now go make some money.
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. And it's sure more logical too. I was just so pretty damn sure it was the unlogical way. ^^haha I needed this ROI talk, I've read both ways of doing it but was not sure which way most people do it, I've always done it this way because the other way just seems harder to deal with. Its good to see more people calculate it like I do.
You're right I had a "/" instead of a "-" sign in there, I fixed it now. (I do that all the time when coding too and it drives me nuts sometimes when debugging the scripts...)
Of course I'm tracking conversions. If you don't track conversions, you may as well flush all your money down the toilet!
Here's how it looks:
1% Adwords
50% Overture
49% MSN Adcenter
The niche I'm in, (debt management) is closely related to the loan niche and specifically debt consolidation. So the keywords on adwords are quite expensive. If you don't get an awesome ratio on your landing site, you're screwed. Once my long tail stuff starts producing in adwords, I should be able to blow through the 100% target.
I see what you mean now. I am keeping track, but would have to go back and total everything up. Generally speaking MSN has the best roi, (and lowest traffic volume). Overture is second best roi and adwords is my lowest roi. There's tons of reasons for it, but the main one is adwords just won't produce for me yet on this project. I'm up against companies that make a lot more per conversion then I do, (companies running their own ppc programs), and they can easily out bid me and still make a great roi. So I have to be creative and find some golden nuggets. The thing is I haven't found any yet in adwords and the ones that are converting on overture and msn, don't necessarily convert on adwords. (I've always found that strange).
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