“In online advertising, a conversion occurs when a click on your ad leads directly to user behavior you deem valuable, such as a purchase, signup, page view, or lead. Google has developed a tool to measure these conversions, and ultimately, help you identify how effective your AdWords ads and keywords are for you. “
The time where some websites or websites could sell advertising to others (either through links or banners) argue based on inflated statistics, has come to an end, since the emergence of Google Analytics. After an extensive introduction, I will explain below how Google Analytics to measure whether or not we used to pay for a link / banner that points to our website.
When one wants to buy ads or banners to others, from other web sites should be measured internally:
* The visits of a particular link or banner provided to our site, and
* The goal conversions that occur due to link / banner
These measurements should be accompanied by a temporary variable, eg a month. But it must take into account before deciding that the recruitment of a banner / link, we do not have this information.
Therefore, we must assess a priori whether or not to buy a banner / link based on external measurements and assessments on certain indicators (whose information is not entirely relevant but it may be indicative), such as Alexa ranking, the Page Rank on Google, statistics published on the site, the authority and the positioning of the web, the reputation of the site which is within the public interest to us, and so on.
Do not explain how such an assessment before deciding to hire a banner or link to a third party. So I will focus on giving a little light on how to assess whether paying or not a link / banner that we have contracted for some time, and we want to help us determine whether or not.
How is a valued link?
Before continuing, I must make a reservation. A text link can give us a double benefit:
* We send views and some of these visits can become leads (prospects), and even sales
* You can benefit from our natural positioning andalusia site in search engines
A banner also gives us visibility, brand recall, etc., but no talk of that.
If the link is valid for transmit their popularity (link SEO friendly) and to position, there is no way to determine how many links that we raise or how much confidence / popularity transcends us from the standpoint of the search engines, PR etc.. Then it is not possible to measure this benefit, but we must bear in mind that there is real and can be assessed only subjectively, or as I say “eye” to estimate a quantifiable value, economically speaking.
From the standpoint of selling a link / banner, you can specify a mode of payment may be different:
* Pay by the number of impressions,
* To be paid for visits shipped
* To be paid for completed action (Pay per Action)
* Pay by period
Unless our goal is to get visibility / branding awareness, I do not recommend paying for a number of impressions banner / link, as it depends on several issues, the CTR (clickthrough rate on the amount of prints) may be very low and this not suit us.
If you pay for visits shipped, we have to have control of the views you submit. We rely on the reports / reports sent to us that we sold the link / banner, but we should control it internally.
If we pay period for a link or banner, we might be interested to know how many visitors we sent on average, in each contract period.
But ultimately the views do not matter, what matters is the quality of those visits.
Suppose that visitors are qualified, because the site gives us the link is very good, and very well focused. Then we know that the visits are of quality, the ability to convert or not leads (prospects), run on our own and selling the link / banner is not our fault if a site is crap and can not make targets ( Visitors who arrive leave without what we expect: contact subscribe to something, register, etc.). But that is another matter.
From our point of view (which we buy the link / banner) can have an idea of the ability to convert our pages or the revised conversion general (or specific to each product / service): ratio of visits to sales ratios visits to leads, or leads to sales ratios.
Moreover conversion tracking channel helps us to make comparisons and determine which channels are more efficient, or provide us with a greater ROI.
How to measure the benefit that gives us a link in relation to their cost
If our site is well optimized and have good conversion ratios, we should expect visits from qualified link / banner that we have bought will yield enough.
So we decided to buy the link / banner for a month, to try and “see what happens.”
To measure the benefit that you provide a link or banner to buy in relation to its cost, first, we must set up goals in Google Analytics. Obviously, even if you do not use Google Analytics, you must create an account before and set it on your site.
In relation to the link / banner tracker does not need to do anything more. Trackea Google Analytics all the visits and referrals, not necessary that we put a link to add any code. It is necessary to place outgoing links to trackers, not incoming.
Performance analysis of the link / banner
Well, when we went back a month and must pay for our link, we must determine whether or not we should continue paying for it. We will then discuss if we sent enough visits on average generate leads that we valued so much more of what we pay in this link.
Enter the panel and then to Google Analytics Traffic Sources>> Referring Sites>> Conversion Goals (tab)
Then find the row of the website that we are interested in analyzing (where is the link to buy). It is important to understand that we can have one or more objectives set for which the link can contribute in different proportions to each of them. But Google Analytics allows us to see the total Percent conversions.
The diagram below will clarify this with an example:
source views Objective 1 = $ 20 = $ 5 Goal 2 Goal Conversion Rate Per Visit Goal Value
sitio.com 180 5% 15% 20% $ 1.75
$ 180 (27 conversions)
$ 135 (36 total conversions)
Total = $ 315 ($ 180 + $ 135) $ 315 / 180
The first row has the data that Google Analytics provides. The second row I added that I understood how the accounts are necessary for grasping the data.
Interpreting the results:
– Source: This is the website from which visitors come (where is the link to buy)
– Visits: The number of visits to the site through this source (in the period studied)
– Objective: The percentage of visits which resulted in a conversion for the Objective
– Goal Conversion Rate: The percentage of visits which resulted in the conversion of at least one of its objectives. It is also the sum of the percentages of the targets set. Here we have two objectives, each with its own value. Then the system calculates the average target value per visit.
– Per Visit Goal Value: The average value (depending on the target value) of a visit to the site. Is calculated by dividing the total target value (the amount of conversions) between the number of visits.
Now let’s simplify things a bit if there is one goal.
We assume that the link cost is $ 500 monthly (which takes a month that we sell the link / banner), and suppose that Target Value: $ 25 (average profit gives us a conversion).
Source Visitas = $ 25 Single Goal Conversion Rate Goal Value obtained by visiting CPC (cost per visitor)
sitio.com 180 20% 20% $ 5 $ 2.78
(20 of 180 gives 36% conversion) (36 / 180 * 100) ($ 900 / 180)
$ 900 is the amount of conversion ($ 500 / 180)
Interpretation of results and conclusion:
The goal “contact” is $ 25 for every 100 contacts generated sales provide us with an average benefit of $ 2500. Another way of looking at it is this: Suppose that our statistics show that:
“for every 100 people contacted, only 5 buy services (5%). Of these 5 members and generated sales of $ 2500 on average. To achieve a sale need approximately 20 contacts. The conversion ratio of contacts sales is 0.05 ”
From this statistic, we calculate the average value of each purchase is $ 500 ($ 2500 / 5), and average value of $ 25 each contact as it is to achieve $ 2500 is required to sell an average of 100 contacts.
In the analyzed period (we assume that is one month since the link monthly pay), from 180 visits received via the link / banner), 20% have become targets, ie 36 users have contacted us (assuming the goal is to “contact”), these 36 users are worth $ 900 for us (36 * $ 25) Why?
Because if we succeed for every 20 contacts a sale every 36 contacts we manage sales 1.8 (remember that these are averages). Each sale represents for us an average of $ 500, hence 1.8 sales are valued at $ 900.
So, if we believe that the target value of $ 900 is due to get 180 visits, each visit is worth $ 5 for us, since $ 900/180 = $ 5. This is the average amount that each visit is for us. Why?
180 views since generated $ 900 (according to our target value), thus potentially generating a visit and on average $ 5
However, what interests us to assign an economic value from each visit?
We are interested in assessing the profit potential mean that each visit gives us, since getting visitors to our site has an investment cost, and whether the benefit of each visit is higher than the cost of making it to arrive, on average, then the investment is justified .
In this case the investment is the link or banner to buy a third, which in our case we charge $ 500 per month. Then do the following account:
If we get $ 500 with 180 hits a month, the cost per visit is $ 2.78 ($ 500/180). This is neither more nor less than the famous CPC or Cost per Click
Finally, if every visit to us is worth $ 5 (on average), but make it cost $ 2.78, we concluded that we should continue to pay for the link / banner, as it provides a positive benefit (ROI positive)
If on the contrary, the CPC is greater than the Target Value for each visit, we must stop paying for that link or banner, for we are losing money, in other words, we have a negative ROI.
That’s it. I hope I have served this notice.