How to determine your correct CPC (Cost per Click) advertising investment
To invest or not to invest, that is the question…
One of the most important tasks facing marketers is How to determine determining the budget for different sections of the digital strategy . If you’re not prepared, it can feel like you’re playing roulette or throwing darts at a dartboard blindfolded with your online marketing . But the truth is that calculating the right advertising investment is much more science than art.
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How to determine your correct advertising investment
How to determine CPC advertising investment
Estimating the marketing spend you need to achieve list of venezuela consumer email optimal results depends on knowing the right formulas and applying them with common sense . To help you get your next budget right, today I want to share with you Brett Farmiloe’s advice in Forbes to determine your correct CPC (Cost Per Click) advertising spend. Let’s go step by step…
Step 1: How to calculate the leads and traffic you need
Obviously, the main objective of CPC marketing investment is to achieve a business objective, usually linked to sales . Therefore, to know how much we should invest, the first thing is to calculate the traffic we need to achieve this objective.
The formulas are very simple:
(Desired revenue / Sales period) / Average sales = Number of customers
Number of customers / Conversion rate = Number of leads
Number of leads / Conversion rate to visits = Number of visits
Let’s see this with an example. Let’s say your annual revenue target is one million euros, and the sales period is one month, i.e. there are 12 sales periods per year. The average sale is 1000 euros. Then:
(€1,000,000 / 12) / €1000 = 83.33 customers per month
To achieve €1 million in annual revenue, you need around 84 customers what is position zero and why is it important to seo? per month. Now, let’s assume that your sales team manages to convert 20% of leads into customers.
83.33 customers / 20% = 416.66 leads per month
And now, for the last step, let’s assume that 5% of the visits to your anhui mobile phone number list website through pay-per-click ads convert into leads, for example, by filling out a form to leave you their contact details. This means that:
416.66 leads / 5% = 8,333.33 visits per month
That is, in this example your monthly goal would be to generate 8,334 visits, of which 417 would become leads and 84 would become customers, resulting in an annual income of one million euros.
The numbers add up, right? But we’re still missing some important data, so let’s look at the next step.