Measuring your business return on investment ROI

It’s important to be sure that the money you’re spending on advertising is leading to solid profits for your business.  Use website analytics information to monitor your progress.  You can use the abundance of information to help determine ROI, and tweak campaigns that aren’t performing as well as they should. With analytics, you’ll see real data, black and white, real numbers pertaining to how traffic is getting to your websites, bounce rates, unique visitors, conversion rates, and so much more.  By far, Google analytics provides the most plentiful data so be sure to attach the Google analytics to your business website.

Cool Google Analytics Apps you can download:  https://www.google.com/analytics/apps/results?category=Reporting%20Tools

ROI

Use ROI information for future planning, so you can spend your budget according to what’s working best for your business. ROI is the ratio of your net profit to your costs.  The exact method you use to calculate ROI depends upon the goals of your campaign, but one way to define ROI is:

 (Revenue – Cost of goods sold) / Cost of goods sold. 

Conversions

Another great way to determine the return on investment is to pay close attention to conversions. So, impressions are great for branding, but if you have a million website impressions and no sales, then how are they really working towards the growth of your business?  A conversion is basically a customer ‘action’ that you find valuable.  (In business, we like action!)  A conversion action could be a purchase a website lead, a phone call, an e-mail, a download of some sort….you get the idea.  A conversion is an action.  What actions you decide are best to measure are completely up to you.  To determine ROI from conversions:

(Revenue measured by conversion – your overall costs) / your overall costs

**If you do paid search advertising with AdWords, you’ll need to link your analytics account to your AdWords account before information will be made available.  Also, the information you receive from your website analytics may differ slightly from the analytics you receive from AdWords.  Note from Google regarding differences in data