Calculating Efficiency

   Despite being around for several years, Internet advertising is relatively very new and many local advertisers are currently learning how to keep track of their advertising efforts. In some cases, an advertiser can simply keep track of the end result of their advertising. However, to be efficient, an advertiser should incorporate tracking methods and measure conversion costs.

  Many local advertisers seek direct communication through collecting an email address or getting a consumer to initiate a phone call. The goal is to calculate the cost of getting a consumer to take action, then determine ways to decrease that cost.  

 Example:

  An auto insurance company in the northeast region of the United States seeks to generate leads during four weeks in February, which is typically the month with the highest accidents because it is also the month with the most snowfall. This advertiser uses both television and local media websites for this campaign. The Television advertising has a specific phone number to track calls and a different number is used for leads through internet advertisng.

 Note: Advertising an internet site on television will increase the internet leads and internet advertising and product exposure can initiate off-line shopping.

  An interactive flash advertisement is created that shows snow falling on a road, then two cars colliding. Followed by "Click here for a free quote - get better coverage for less money".  Upon clicking on the advertisement, consumers are taken to a landing page that asks specific questions and collects name, email and phone. This is method of internet advertising is direct and minimizes conversion steps. Consumers go from an advertisement on a local media website directly to a landing page.

 STEP 1

Idenifty conversion steps

1. Click Through from Advertiser Page to the landing page

2. Collection of contact information

STEP 2

Calculate Conversion Costs

Insurance company purchases 300,000 Gross for $3,000 (cost per thousand of $10)

Click-through: 600 clicks on all advertisements a conversion of 0.2%

1st Level Conversion Cost: $5

3% or 18 consumers of 600 left their contact information

2nd Level Conversion Cost: $166.67

STEP 3

Decrease 2nd Level Conversion Cost

Determine how to decrease your second level conversion cost by increasing the amount of people that click through your ad.

Things to consider:

• Ad effectiveness - test call-to-action message, color and graphic placement
• Sites with higher click-throughs - Increase impressions on sites that generated more leads
• Use best practices to optimize the level of conversion

  There are various strategies that can be employed to increase the efficiency of your advertising efforts. And analyzing conversion during the advertising period can provide insight for changes to increase response and planning for future campaigns.

  Gonzalez Consulting has experience with local internet advertising strategies. This includes designing ads, analyzing effectiveness, optimizing response and decreasing conversion costs. Contact us to find out how we can help.