• Mark Kennedy

    Great post. With PPC, it really is about the ROI. One thing you can consider if you have the ability to access the statistics. What is the value of a repeat customer?

    So for example, you have the average sale at $64.10 and the CPA is $7.09. After you crunch the numbers you see that the campaign is profitable at that CPC and those click-through and conversion rates. Good all around.

    However, does the person who makes that purchase come back later and buy another product? If you have the data that says they do, that can give you some room to increase your CPC for more traffic.

    Now, that will/may increase your CPA, but if the average search customer is returning to make another purchase later on, then a slight increase in the CPA works as long as it doesn’t outweigh the revenue of a repeat transaction. In other words, over the course of a set period (month year, etc), is that average revenue of $64.10 actually higher?

    The difficult part is tracking that repeat business, but if it can be done you have that much more data to use to the campaign’s advantage.

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  • joanne hart

    @Mark: Thanks for the great feedback! I agree completely with you that AdWords ROI is not accurate unless the value of a repeat customer is factored in. It might be a good idea to supplement the charts above with Analytics data on repeat customer trends in order to get a general feel for how much repeat business you might expect from conversions that occurred over that same period of time. Just a thought!

  • Nex

    Can you attach the spread sheet with your formulas?