Evolving the Way we Measure PPC
Program Value with Google Analytics
Jeff Sauer
Founder, Knowledge.Land
Jeff Sauer | Knowledge.land | @jeffalytics
Your Guide
2
Jeff Sauer
Marketer and Entrepreneur
Knowledge.Land
Minneapolis, M...
Back in 2006…
Jeff Sauer | Knowledge.land | @jeffalytics
My Vocabulary Was Mainly
Acronyms
CTR CPC
CPA ROI?
Jeff Sauer | Knowledge.land | @jeffalytics
Put a Lot of Trust into Google
Metrics
Jeff Sauer | Knowledge.land | @jeffalytics
What I Thought Was ROI
Look at that ROI!
Now Give me all
of your budget!
Jeff Sauer | Knowledge.land | @jeffalytics
No, Seriously. Give Me Your
Budget
Jeff Sauer | Knowledge.land | @jeffalytics
Decision Makers Were Skeptical
That is ROAS,
Not ROI
Jeff Sauer | Knowledge.land | @jeffalytics
I had Tool Blindness
Photo Credit: mirror.co.uk
Jeff Sauer | Knowledge.land | @jeffalytics
And Google Dependency
The Cure?
Learn to Think Like a
Business Owner
Jeff Sauer | Knowledge.land | @jeffalytics
What is Important to Us
CPC CTR
CPA ROAS
Quality
Score
CPL/CRO/LT
V, etc.
Jeff Sauer | Knowledge.land | @jeffalytics
What is Important to a Business
Owner
Net Profit
None of Our
Tools Measure
That!
Jeff Sauer | Knowledge.land | @jeffalytics
We Need Help!
Jeff Sauer | Knowledge.land | @jeffalytics
Enter Google Universal Analytics
Jeff Sauer | Knowledge.land | @jeffalytics
Soon We Can Measure
Everything
8 Ways to
Evolve Our
PPC
Measurement
Jeff Sauer | Knowledge.land | @jeffalytics
1) Collect the Right Data
Jeff Sauer | Knowledge.land | @jeffalytics
Don’t Let IT Be a Roadblock
• Nerd/IT person as roadblock
Jeff Sauer | Knowledge.land | @jeffalytics
Use Google Tag Manager!
Get Google Tag Manager: google.com/tagmanager
Jeff Sauer | Knowledge.land | @jeffalytics
Now We Can Easily Track
Website Analytics Heat Maps
Remarketing Conversion Trac...
Jeff Sauer | Knowledge.land | @jeffalytics
2) Import Your Cost Data
Jeff Sauer | Knowledge.land | @jeffalytics
Start with Bing Ad Spend
Jeff Sauer | Knowledge.land | @jeffalytics
And Automate Your Bing Data
Upload
Supermetrics Data Uploader: http://supermetr...
Jeff Sauer | Knowledge.land | @jeffalytics
Other Data Needs Developers
Pro Tip: Import
your cost data for
Agency fees, Soc...
Jeff Sauer | Knowledge.land | @jeffalytics
3) Use Custom Dimensions and
Metrics
Photo Credit: Caneles via Compfight cc
Jeff Sauer | Knowledge.land | @jeffalytics
Add Your Data into Google Analytics
With Universal Analytics you
can create up ...
Jeff Sauer | Knowledge.land | @jeffalytics
4) Establish Proper Attribution
Jeff Sauer | Knowledge.land | @jeffalytics
Attribution Models in Google
Analytics
Jeff Sauer | Knowledge.land | @jeffalytics
Compare Multiple Attribution Models
PPC is Under
Represented
in a Last Click
Mo...
Jeff Sauer | Knowledge.land | @jeffalytics
5) Take Data Out of the Tools
(Don’t Be Afraid)
Photo Credit: dotpolka via Comp...
Taking Data
Out of the Tool
Allows you to:
Jeff Sauer | Knowledge.land | @jeffalytics
6) Calculate Fully Loaded Costs
Photo Credit: brongaeh via Compfight
Jeff Sauer | Knowledge.land | @jeffalytics
How Profit Should Be Calculated
Revenue
Jeff Sauer | Knowledge.land | @jeffalytics
Subtract Our Ad Spend
Revenue
Advertising
Investment
Jeff Sauer | Knowledge.land | @jeffalytics
Subtract Cost of Selling Each
Product
Revenue
Advertising
Investment
Product
Co...
Jeff Sauer | Knowledge.land | @jeffalytics
Subtract Fixed Costs of Business
Revenue
Advertising
Investment
Product
Cost
Fi...
Jeff Sauer | Knowledge.land | @jeffalytics
Now You Have Net Profit
Revenue
Advertising
Investment
Product
Cost
Fixed
Costs...
Jeff Sauer | Knowledge.land | @jeffalytics
7) Determine Your True ROI
Jeff Sauer | Knowledge.land | @jeffalytics
Here’s an ROI Equation to Use
Gain From
Investment
(Net Profit)
Cost of
Investm...
Jeff Sauer | Knowledge.land | @jeffalytics
Here’s a Real Life Example
Revenue $82,730 100%
Ad Spend $10,942 -
Return on Ad...
Jeff Sauer | Knowledge.land | @jeffalytics
That’s a Big Difference!
Revenue $82,730 100%
Ad Spend $10,942 -
Return on Ad S...
True ROI =
Bigger
Budgets!
Jeff Sauer | Knowledge.land | @jeffalytics
8) Add in Life Time Value
Jeff Sauer | Knowledge.land | @jeffalytics
Lifetime Value = Long Term
Investment
Revenue $124,095 100%
Ad Spend $10,942 -
...
Don’t Forget
About Lifetime
Value
Jeff Sauer | Knowledge.land | @jeffalytics
Thank You!
49
Jeff Sauer
Marketer and Entrepreneur
Knowledge.Land
Minneapolis, ...
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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.

Published in: Marketing, Technology, Business
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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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