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My December PPC Return on Investment
What serach engines promise and what they deliver.
shopkeeper




msg:1229453
 12:03 am on Jan 18, 2004 (gmt 0)

I kept a close record of my PPC spending and tracked my sales to see in black and white where my advertizing dollars are going. I am in retail, and here are my December returns:

Dealtime: 672%
Adwords: 555%
Overture: 178%
Yahoo! Shopping: 0%

This is the way I calculated my ROI: For example, let's say I spent $100 on advertizing through a particular PPC engine which brought traffic to my site resulting in $300 worth of sales. My ROI is 300%.

I'm thinking about ditching Overture, although I find myself emotionally connected to it. Yet the numbers speak for themselves... Any suggestions for other venues?

How about your numbers?

 

Bobby_Davro




msg:1229454
 1:50 am on Jan 18, 2004 (gmt 0)

Why would you ditch Overture with such a healthy ROI?

Conard




msg:1229455
 2:35 am on Jan 18, 2004 (gmt 0)

I think the Shopkeeper's math is a little flawed as far as ROI goes.

If you working on a standard keystone mark up and you sold $178 after spending $100 on advertising you lost $11 on the deal. That is not a 178% ROI.

penfold25




msg:1229456
 7:01 am on Jan 18, 2004 (gmt 0)

i think shopkeeper hasnt deducted the cost of goods sold in his ROI calculationl

eWhisper




msg:1229457
 2:14 pm on Jan 18, 2004 (gmt 0)

Don't forget the value of a lifetime customer.

I have a few clients that on some of the PPCs, have ROIs of 0% to slighlty negative on the initial buy. However, as the average customer to these sites will make multiple purchases a year, and they return directly to the site without paying for it on the consecutive purchases, their yearly ROI on those keywords is actually very positive.

shopkeeper




msg:1229458
 3:42 pm on Jan 18, 2004 (gmt 0)

No, I haven't considered the cost of goods, or the "standard keystone mark up". I'm not trying to analyze my business here, just the performance of the search engines.

I think that when it comes to deciding on how to spend your money on PPC, there is a lot of guessing, "feeling", and assuming going on.

If in my business Dealtime outperforms Overture by over 3.7 times, why do you defend Overture?

It's all about perception. We think that Overture should perform, therefore we talk ourselves into believing that it does.

Anyone has their numbers to share?

Bobby_Davro




msg:1229459
 4:07 pm on Jan 18, 2004 (gmt 0)

I think that it has nothing to do with perception or any other voodoo. It is pure numbers. If you make a profit from Overture then it is performing. If not, don't use it.

Dealtime may be performing better, but that doesn't mean the others aren't making a profit for you. I have no expectations about whether Overture will work for you or not; it all depends on your costs and profit margins, nothing else.

WebStart




msg:1229460
 11:21 pm on Jan 19, 2004 (gmt 0)

It is important to know how to calculate "ROI" correctly; and to use the term correctly; but even if you are just measuring the amount of sales (revenue) generated (and not actually your true "return on investment") -- and Overture provides revenue at the rate you claim, it is simply providing less than DealTime, but providing, nonetheless.

But thanks for the stats, they are interesting. And they pretty much confirm many other past threads I have seen on this general subject of which PPCs/Ad venues provide the best return. Except this is the first I have seen DealTime mentioned. Good post.

mquarles




msg:1229461
 4:36 pm on Jan 20, 2004 (gmt 0)

If in my business Dealtime outperforms Overture by over 3.7 times, why do you defend Overture?

I only defend what works for me. Unless you have monstrous markups, Overture is not working for you, so I would bail or figure out why Overture is converting so much lower.

Whether AdWords, Overture, or others give the best ROI seems to vary dramatically based on what is being sold. Test it yourself, and go by your own numbers. It's the only way to really know.

MQ

Bobby_Davro




msg:1229462
 4:38 pm on Jan 20, 2004 (gmt 0)

The other thing to remember with PPC campaigns is that it does depend on how much you are bidding. Overture might be giving a poor ROI, but how much are you paying per click? Can you accept less traffic (i.e. pay less per click) and get a higher ROI from them?

sem4u




msg:1229463
 11:09 am on Jan 21, 2004 (gmt 0)

Does anyone have any experience they wish to share on UK shopping search engines such as Kelkoo, Dealtime, Lycos, Pricerunner, etc.?

rustyzipper




msg:1229464
 10:12 pm on Jan 21, 2004 (gmt 0)

We keep our bids close to .05 & we only bid on very very relevant targeted keywords.

Our revenue per visitor for the month of November 03 was:

Google = 18.2 cents per visitor
Overture = 20.7 cents per visitor

Can't really compare directly though since we've been using standard matching on Google & phrase match on Overture.

We also restrict our Google Adwords ads to countries we're likely to get business from. Overture as far as I know doesn't allow for this level of targeting.

We're going to switch our Overture ads to Phrase Match & I'll report back on January stats if anyone finds this useful.

Given similarly structured campaigns & keywords our experience has been that Overture & Google over time basically perform the same but we get more than double the traffic from Adwords as we do Overture. We've been advertising on Overture since 1998 I think & Adwords since it's inception and the data has pretty much held steady.

Our Google traffic dropped when they dropped Broad matching in favor of Expanded Broad Matching - because of low ROI on Expanded Broad Matching, we had to go back to Phrase matching which is resulting in less traffic.

Hope this is helpful.

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