18 Oct 2007

Conversion rates and return on investment

Determining your websites conversion rate is an important metric when deciding on how much to spend on your marketing campaigns for your website - whether its optimisation, pay-per-click (Google Adwords), banner advertising or e-mail campaigns.

Use the following formula to determine your conversion rate:

Number of Calls to Action Completed/The Number of Visitors x 100 = Conversion rate

For example, if you had 5 calls to action and 100 visitors then your conversion rate would be 5%. 

We can then use this conversion rate to determine a budget based on a return on investment model.  Click in the image above to show a return on investment model for determining a Google Adwords budget.

Remember, like all marketing campaigns, each traffic source will provide you with a different conversion rate and return on investment model.  Industry studies show that pay-per-click traffic is twice as likely to convert than organic results, due to the ability to use targeted keywords and target geographical segments.  However, organic optimisation results are 70 to 80 percent more likely to generate a click through than a pay-per-click advert. 

Conversion rates of course, are based on what you already know about your website traffic.  If you are just starting to drive traffic to your website, then talk to Bang! Online Marketing.  As part of your website performance plan, we conduct a search volume analysis and determine the best Google Adwords budget for you.   We track each traffic source and the conversion rates, and provide you with intelligent data to enable you to make informed decisions about your marketing spend.

Contact Bang! Online Marketing today.