Why Click Through Rate And Cost Per Click Don't Matter

Why Click Through Rate And Cost Per Click Don't Matter
by Matthew Gillogly
What I'm about to share with be go against everything you may have been taught about online marketing and Google adwords.

Before I go any further, you need to understand I share this with you, only because I'm sick of all the bogus information in the marketplace about adwords and online marketing.

All I ask is you keep an open mind to what I'm about to share.

In this email, I'll give you one number to review weekly. This number will tell you if your marketing is making you money.

A few more warnings. Your Pay Per Click, SEO person probably doesn't know anything about this number and how to get it... scientifically.

This one number will be able to tell, beyond a shadow of a doubt, if the money you are spending on marketing is working.

First off, let me tell you what this number is NOT.

It is NOT... Click Through Rate (CTR), or Cost Per Click (CPC), it is not the percent of conversions on your landing page. Nor is it the percentage of clickers to an offer.

The only number you need to track and look at weekly is:

LeadSource Income

Chances are, you've never even heard of LeadSource Income or even know what it means to you and your company.

Leadsource income is simple. It tells you the amount of income you made from a leadsource.

What is a LeadSource? A Leadsource is a marketing medium. Like Google Pay Per Click, SEO or a print ad.

Tracking this number will tell you what each marketing medium made you in revenue .

In order to track Leadsource Income, you need to track each marketing initiative. For example, all of your Google PPC marketing has to be tracked back to the income you generated off of leads from Google PPC. (Thus the name LeadSource Income)

Let me make it more simple.

In the month of August you invest $2,500 in Google PPC, $3,000 in SEO, $4,000 in Print Marketing and $1,000 on Yahoo/MSN.

You, as the owner or main decision maker, want to know if this investment made you any revenue.

A report to our clients would look something like this:

LeadSource Income

Google PPC - Cost $2,500 - Income $2,500
SEO - Cost $3,000 - Income $1,000
Print - Cost $4,000 - Income $2,900
Yahoo - Cost $1,000 - Income $2,000

Now you and your team are armed with the right data to make decisions on where to increase and cut marketing budgets. In just the first 30 days, we can see we've made money or broken even on two marketing initiatives and lost on two.

Granted 30 days is not a sufficient amount of time to get the real picture. (That comes in when we discuss lifetime value of the customer) But it gives us a real snapshot of our efforts.

Why Guessing And Fuzzy Math On LeadSource
Income Is A Bad Idea

Most marketing teams can't give you the specific, quantifiable, scientific results on how the marketing is performing. Usually it's guess work.

What is needed is a fool proof system to tag a lead, once it enters your database, as a specific LeadSource. (More on that in another email.)

For the most part, marketing teams guess at which web site, print ad, adwords are working. They look at cost per click or the opt in percentage, figuring that's good enough.

It's not.

While all those numbers are important, none tell you what is making you money and how money it's making you.

Guessing on the financial return on investment for your marketing is not a good long term strategy. One I suggest you work on changing... quickly.

When we went to work with The Tuck School Of Business at Dartmouth University, they had a similar situation. They spent a fortune on marketing, but couldn't tell what was working.

After 6 months, we were able to show them, specifically and with quantifiable data, what marketing was bringing in the most and best new students.

To, read our case study on Dartmouth School Of Business. Just click this link.

We have done the exact same thing with other companies like: Robert Morris University in Chicago, Campus Crusade For Christ, just to name a few.

Resolve now to track what LeadSource is bringing you the most revenue with the best return on your investment.

Remember, it's all about revenue.

Later,


Matthew Gillogly
Partner - Chief Marketing Officer
Capstone Strategic Partners

PS. Tomorrow, I'm going to take this one step further. It's called 'Lifetime Value' of a customer. When you grasp LeadSource Income and Lifetime Value of a Customer, you'll be well on your way to a huge business breakthrough.