Evolving the Way we Measure PPC Program Value with Google Analytics

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The new features in Universal Google Analytics are an awesome way to evolve the way you measure your PPC programs. Take advantage of data imports, exports and clear thinking around the value we create, and you will be a hero to your organization.

This presentation was first given at HeroConf in Austin, TX to a crowd of PPC experts.

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  • What about order fulfillment costs? That being what it costs you to pick, pack & ship orders? One would assume that would be a fixed cost, but with freight and distance varying in determining your shipping costs, it cannot be the case. We do fulfillment as a fixed % cost of revenue which is then subtracted from Product Margin revenue along with advertising costs to give us Contribution Margin income which divided by your costs gives you a true ROI.
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Evolving the Way we Measure PPC Program Value with Google Analytics

  1. 1. Evolving the Way we Measure PPC Program Value with Google Analytics Jeff Sauer Founder, Knowledge.Land
  2. 2. Jeff Sauer | Knowledge.land | @jeffalytics Your Guide 2 Jeff Sauer Marketer and Entrepreneur Knowledge.Land Minneapolis, MN, USA Email: jeff@jeffalytics.com google.com/+JeffSauer Newsletter: bit.ly/jeffalytics
  3. 3. Back in 2006…
  4. 4. Jeff Sauer | Knowledge.land | @jeffalytics My Vocabulary Was Mainly Acronyms CTR CPC CPA ROI?
  5. 5. Jeff Sauer | Knowledge.land | @jeffalytics Put a Lot of Trust into Google Metrics
  6. 6. Jeff Sauer | Knowledge.land | @jeffalytics What I Thought Was ROI Look at that ROI! Now Give me all of your budget!
  7. 7. Jeff Sauer | Knowledge.land | @jeffalytics No, Seriously. Give Me Your Budget
  8. 8. Jeff Sauer | Knowledge.land | @jeffalytics Decision Makers Were Skeptical
  9. 9. That is ROAS, Not ROI
  10. 10. Jeff Sauer | Knowledge.land | @jeffalytics I had Tool Blindness Photo Credit: mirror.co.uk
  11. 11. Jeff Sauer | Knowledge.land | @jeffalytics And Google Dependency
  12. 12. The Cure? Learn to Think Like a Business Owner
  13. 13. Jeff Sauer | Knowledge.land | @jeffalytics What is Important to Us CPC CTR CPA ROAS Quality Score CPL/CRO/LT V, etc.
  14. 14. Jeff Sauer | Knowledge.land | @jeffalytics What is Important to a Business Owner Net Profit
  15. 15. None of Our Tools Measure That!
  16. 16. Jeff Sauer | Knowledge.land | @jeffalytics We Need Help!
  17. 17. Jeff Sauer | Knowledge.land | @jeffalytics Enter Google Universal Analytics
  18. 18. Jeff Sauer | Knowledge.land | @jeffalytics Soon We Can Measure Everything
  19. 19. 8 Ways to Evolve Our PPC Measurement
  20. 20. Jeff Sauer | Knowledge.land | @jeffalytics 1) Collect the Right Data
  21. 21. Jeff Sauer | Knowledge.land | @jeffalytics Don’t Let IT Be a Roadblock • Nerd/IT person as roadblock
  22. 22. Jeff Sauer | Knowledge.land | @jeffalytics Use Google Tag Manager! Get Google Tag Manager: google.com/tagmanager
  23. 23. Jeff Sauer | Knowledge.land | @jeffalytics Now We Can Easily Track Website Analytics Heat Maps Remarketing Conversion Tracking Audience Measurement Display Ads
  24. 24. Jeff Sauer | Knowledge.land | @jeffalytics 2) Import Your Cost Data
  25. 25. Jeff Sauer | Knowledge.land | @jeffalytics Start with Bing Ad Spend
  26. 26. Jeff Sauer | Knowledge.land | @jeffalytics And Automate Your Bing Data Upload Supermetrics Data Uploader: http://supermetrics.com/product/supermetrics-uploader/
  27. 27. Jeff Sauer | Knowledge.land | @jeffalytics Other Data Needs Developers Pro Tip: Import your cost data for Agency fees, Social, Email, SEO, PR, etc.
  28. 28. Jeff Sauer | Knowledge.land | @jeffalytics 3) Use Custom Dimensions and Metrics Photo Credit: Caneles via Compfight cc
  29. 29. Jeff Sauer | Knowledge.land | @jeffalytics Add Your Data into Google Analytics With Universal Analytics you can create up to 20 custom dimensions!
  30. 30. Jeff Sauer | Knowledge.land | @jeffalytics 4) Establish Proper Attribution
  31. 31. Jeff Sauer | Knowledge.land | @jeffalytics Attribution Models in Google Analytics
  32. 32. Jeff Sauer | Knowledge.land | @jeffalytics Compare Multiple Attribution Models PPC is Under Represented in a Last Click Model
  33. 33. Jeff Sauer | Knowledge.land | @jeffalytics 5) Take Data Out of the Tools (Don’t Be Afraid) Photo Credit: dotpolka via Compfight
  34. 34. Taking Data Out of the Tool Allows you to:
  35. 35. Jeff Sauer | Knowledge.land | @jeffalytics 6) Calculate Fully Loaded Costs Photo Credit: brongaeh via Compfight
  36. 36. Jeff Sauer | Knowledge.land | @jeffalytics How Profit Should Be Calculated Revenue
  37. 37. Jeff Sauer | Knowledge.land | @jeffalytics Subtract Our Ad Spend Revenue Advertising Investment
  38. 38. Jeff Sauer | Knowledge.land | @jeffalytics Subtract Cost of Selling Each Product Revenue Advertising Investment Product Cost
  39. 39. Jeff Sauer | Knowledge.land | @jeffalytics Subtract Fixed Costs of Business Revenue Advertising Investment Product Cost Fixed Costs
  40. 40. Jeff Sauer | Knowledge.land | @jeffalytics Now You Have Net Profit Revenue Advertising Investment Product Cost Fixed Costs Net Profit
  41. 41. Jeff Sauer | Knowledge.land | @jeffalytics 7) Determine Your True ROI
  42. 42. Jeff Sauer | Knowledge.land | @jeffalytics Here’s an ROI Equation to Use Gain From Investment (Net Profit) Cost of Investment Cost of Investment ROI True ROI Measurement: http://bit.ly/TrueROI
  43. 43. Jeff Sauer | Knowledge.land | @jeffalytics Here’s a Real Life Example 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%
  44. 44. Jeff Sauer | Knowledge.land | @jeffalytics That’s a Big Difference! 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% There is a Big Difference between tools and reality! Learn How To Get This Spreadsheet: http://bit.ly/AdWordsROI
  45. 45. True ROI = Bigger Budgets!
  46. 46. Jeff Sauer | Knowledge.land | @jeffalytics 8) Add in Life Time Value
  47. 47. Jeff Sauer | Knowledge.land | @jeffalytics Lifetime Value = Long Term Investment 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%
  48. 48. Don’t Forget About Lifetime Value
  49. 49. Jeff Sauer | Knowledge.land | @jeffalytics Thank You! 49 Jeff Sauer Marketer and Entrepreneur Knowledge.Land Minneapolis, MN, USA Email: jeff@jeffalytics.com google.com/+JeffSauer Newsletter: bit.ly/jeffalytics

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