Remember those word problems we used to have in school and how much you hated them?
If you’re in marketing whether that’s affiliate marketing or offline marketing, you’re involved in one big word problem all day long. Lots of algebra and figuring out what the numbers need to be to make things work. I know most of you just throw campaigns up and see what happens with some basic targets to hit. But what if you had a good idea before you started. You can test how different things would tweak your profitability. Have you ever done the math on a 10% conversion rate improvement? Or what about a 5% ctr improvement on one of you ads? How does that effect profitability?
In this series of posts I’m going to talk about the formula’s we use to figure out the math of marketing. I know it’s not something fun to most but it’s really interesting to see what little improvements can do in every step of the process. I’m coding up some calculators which I hope I’ll have done by the end of the weekend. Then you can just plug in your metrics and come up with some insightful answers without doing all this math.
Terms we’ll be working with:
- Impressions = Number of times your add is shown
- Click = vistor to your website
- CPM = Cost per thousand impressions
- CTR = Click Thru Rate, how many people click through and and or page
- CPC = Cost per Click, how much you pay for each click
- Conversion = takes some action like buying something, generating a lead. Basically something you make money one.
- Conversion Rate = the percentage of people that come to a particular offer that turn into conversion
- Payout = value of the conversion. I’m an internet marketer so payout is my lingo.
- EPC = Earnings Per Click, how much you make for each click that comes to the offer page
I know for our advanced readers you already know all that crap but we have all types here. 