Increasing Your Media Spend Efficiency by 1 Million % (give or take)

Conversion rates, click through %, visitor to lead, lead to sale…all very important stats when looking at an Internet marketing campaign. Conversion rates can sometime be confusing, but are very very important and can make or break campaigns.

In this post we will look at how we can dramatically increase the efficiency of your ad spend with a few steps.

Lets break this down – the stats we need to look at are:

1) Click through rate from your add and CPC (cost per click)

2) Conversion rate of your visitor to a lead

Click through rate from add or link and CPC (cost per click)

This stat is important in that it determines your cost per visitor and contributes to your cost per lead. The efficiency of your cost per click campaign can dramatically affect your return on investment.

Lets say you are spending $1000/month in cost per click funds and receiving 1000 visitors and getting 10 leads.

After tweaking the campaign by lowering the cost per click, and increasing click through of the ads by adjusting your ad copy you are able to achieve 2000 visitors and 20 leads – not bad!

Well lets say now we look at the conversion rate of the ads, remove non-performing keyphrases and ads, and focus only on campaigns and keyphrases that are converting into leads.

If we are able to improve the efficiency of the campaign by 30% – we are spending $1000/month, and we are now getting 2000 visitors, and receiving 30 leads – 20 more leads than the original – again not bad!

So… onto the next conversion rate…

Conversion rate of your visitor to a lead

So we are now getting 2000 visitors to the site and we are getting 30 leads – or a conversion rate of 1.5%. Not a bad conversion rate but as the marketing manager I think I can do better – so I set-up an A/B test via Google Website Optimizer.

After a few experiments I am able to increase my conversion rate from 1.5% to 3.0%. So now I am getting 2000 visitors to the site with a 3.0% conversion rate or 60 leads.

So – by doubling my traffic via adjusting the CPC spend and ads, increasing the efficiency of my ad campaign by 30% via concentrating on converting terms, and by doubling the conversion rate via A/B tests, we ended up with a net increase in leads of 600% from our original – and we are still spending the same amount in ad spend.

Nice work! Your company makes more money, you get a raise, and you get to go on a nice all inclusive vacation!

This example shows the power of conversion rates and the fact that by making relatively small adjustments throughout the campaign you can end up with a much larger net result.

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