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"If we give you 'x' more $, how much can we expect in conversions?"

Follower ✭ ☆ ☆
# 1
Follower ✭ ☆ ☆

Hi Community!

 

To preface this question -- I run digital advertising programs in-house for a b2b software company.

 

I've been given the task to come up with some forecasting/projection numbers based on spend... I'd like to be able to show this on a sliding scale, because as we all know, $1 in is not always $1 out...

 

The more you spend/bid, you will eventually hit a ceiling -- diminishing returns.

 

I am then posed with the question "If we give you 'x' amount of dollars, what does that equal in terms of conversion volume?"

 

What is the best way to represent/calculate this phenomena?

 

We have some data around throttle/bid experiments we've done for our generic search terms (about 30 days of data), which we can use comparison data to apply a ratio -- but i'm not sure which numbers/percentages to use here.

 

 

Any thoughts community? Anything will help here.

 

 

Best,

JP

Re: "If we give you 'x' more $, how much can we expect in convers

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# 2
Explorer ✭ ✭ ✭

Hello JP,

 

I am trying solve this matter. May be I am wrong so pardon me if I am wrong

 

I am giving an  example -

 

Say suppose Advertisng budget is 30000 & Average Sale Value is 3000

 

If the profit margin is 30% then it would be 3000 * 30% = 900

 

Now we assume estimated CPC is 5

 

Then estimated clicks would be = 30000/5= 6000

 

Estimated Conversion = 30000/900 = 33

 

You need to know about -

 

1. Budget

2. Average Sale Value

3. profit margin

 

Hope this helps. Please rectify me if I am wrong.

 

Thanks,

Kaushik

"If we give you 'x' more $, how much can we expect in conversions?"

Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭

yes i do im working with a rat race of nobodys .i do stock nationail sec too make law

"If we give you 'x' more $, how much can we expect in conversions?"

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# 4
Participant ✭ ✭ ☆

The AdWords campaign metrics (key performance indicators, or kpi's) you will want to familiarize with include:

 

• Ad spend (daily, monthly)

• Average cost per click

• Conversion Rate (% of clicks turned into conversion)

• Cost per Conversion (or CPA)

• Return on Ad Spend (ROAS)

• Search Impression share

 

In theory, just knowing your cost per conversion you could linearly predict the # of conversions for any daily/monthly ad spend.  However, campaigns do not usually scale in a linear fashion, except for small changes in ad spend.  

 

Search impression share can be misleading, because as your ad spend increases the size of the market will seem to increase.  However at some point the campaign will "saturate" and you will be buying as many profitable clicks as possible, for that campaign's configuration and for market conditions (demand) at that point in time.  

 

It is best to experiment with modest increases in budget to see how the kpi's respond. 

 

And keep in mind, AdWords campaigns are not static; market conditions can and do change.  It is always important to be monitoring the behavior of campaigns both to respond to market conditions, and to continually optimize in order to extract better performance out of the ad spend.