The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Welcome to the only entrepreneur forum dedicated to building life-changing wealth.

Build a Fastlane business. Earn real financial freedom. Join free.

Join over 80,000 entrepreneurs who have rejected the paradigm of mediocrity and said "NO!" to underpaid jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence.

Free registration at the forum removes this block.

Online Direct Response Metrics

Marketing, social media, advertising

Andy Black

Help people. Get paid. Help more people.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
374%
May 20, 2014
17,809
66,563
Ireland
Watch this 6 minute video if you do any paid advertising, or are considering it.

View: https://youtu.be/of3JgwUCxqU



EXAMPLE

You're spending $100 a day for 100 clicks, and making $50 revenue from 2 sales.

Metrics:
Cost = $100
Clicks = 100
Sales = 2
Revenue (Earnings) = $50

Calculated metrics:
Profit = -$50

cost-per-sale = $50
revenue-per-sale = $25

Or another way:
cost-per-click (CPC) = $1.00
earning-per-click (EPC) = $0.50

You're losing money. So drop bids until your CPC is $0.50. Then you're running breakeven. (This assumes the traffic quality remains constant and doesn't get worse.)

You'll lose ad position, and your Impression Share and ad CTR will both drop.

I'd guess you'd end up with a quarter to an eighth the volume of inbound clicks. So about 12 to 25 clicks.

So you're break-even, but have lost volume.

Now get into a continuous cycle of fixing leaks in your funnel, and increasing visitor life-time-value (LTV) so that your EPC increases. Each time you do that, you can increase your bids and drive more volume.



Apart from the initial budget to buy data and determine your EPC, there really is no reason to lose any money.

You just keep dropping bids till you're break-even or are profitable.

You may have to drop them so low you get no volume... in which case you get no clicks, and therefore have no costs anyway.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Andy Black

Help people. Get paid. Help more people.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
374%
May 20, 2014
17,809
66,563
Ireland
Why are you not a voice over? Awesome video, very easy to understand.

Thanks man. I'm getting better at these videos. I'm way better in front of a flipchart bouncing around. It's hard to get the passion into my voice when I'm sat down, reading my script, and trying to keep quiet for fear of waking the kids!
 

DaRK9

Gold Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
213%
May 23, 2014
767
1,632
Thanks man. I'm getting better at these videos. I'm way better in front of a flipchart bouncing around. It's hard to get the passion into my voice when I'm sat down, reading my script, and trying to keep quiet for fear of waking the kids!
I can relate to that. I've learned to stand up and spread my papers over my desk when making calls.

So do you have an AdWords eBook or video guide out yet? I've honestly never understood AdWords until I started reading your threads.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Andy Black

Help people. Get paid. Help more people.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
374%
May 20, 2014
17,809
66,563
Ireland
So do you have an AdWords eBook or video guide out yet? I've honestly never understood AdWords until I started reading your threads.

Interesting feedback. Maybe I'm onto something! :)

I'm testing the waters with content and monetisation at the moment. I'll hopefully have something soon that I can direct cold traffic to so that I can apply my own skills to my own business. In the meantime I've a small paid forum while I work out what I'm doing.
 

Andy Black

Help people. Get paid. Help more people.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
374%
May 20, 2014
17,809
66,563
Ireland
Stop worrying about Key Performance Indicators (KPIs).

Worry about Performance instead.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

PedroG

Silver Contributor
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
263%
Oct 1, 2013
298
785
NH
It's harder to figure out your RPC when you're offering a 30 day trial. I'm curious as to how people deal with this. You won't know for 30 days whether or not those who signed up for the trial will actually subscribe.

In this case, is the option here to keep track of the percentage of users that eventually do subscribe after the trial, and just use this to figure out RPC (using the expected lifetime value, of course)?

Also, in this 30-day trial scenario, should we keep track of which keyword resulted in a user actually subscribing after the 30-day trial has passed? Or is it enough to keep track of the users who just signed up for the trial, because we're assuming if they signed up for the trial, that the product was a good fit for what they were searching for, and anything after that isn't related to the keywords themselves, but maybe they just didn't like the product or the price? Does my question make sense?
 

Andy Black

Help people. Get paid. Help more people.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
374%
May 20, 2014
17,809
66,563
Ireland
It's harder to figure out your RPC when you're offering a 30 day trial. I'm curious as to how people deal with this. You won't know for 30 days whether or not those who signed up for the trial will actually subscribe.

In this case, is the option here to keep track of the percentage of users that eventually do subscribe after the trial, and just use this to figure out RPC (using the expected lifetime value, of course)?

Also, in this 30-day trial scenario, should we keep track of which keyword resulted in a user actually subscribing after the 30-day trial has passed? Or is it enough to keep track of the users who just signed up for the trial, because we're assuming if they signed up for the trial, that the product was a good fit for what they were searching for, and anything after that isn't related to the keywords themselves, but maybe they just didn't like the product or the price? Does my question make sense?
Yes, if you can roll the LTV into the RPC (EPC) then that's preferable. Getting it down to the keyword level would be nice, but will need a lot of (accurate) data. Most businesses I've worked with don't have their data that granular, or that accurate anyway.

I've worked with some businesses that model using a 1 year LTV and then with a 2 year LTV. Their finance department sometimes told me to run with the 2 year LTV, and then sometimes with the 1 year LTV. Lots of bid adjustments going on when they switch...
 

Andy Black

Help people. Get paid. Help more people.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
374%
May 20, 2014
17,809
66,563
Ireland
So do you have an AdWords eBook or video guide out yet? I've honestly never understood AdWords until I started reading your threads.
Dayum. This was posted 08-Jun-2014.

I only just brought out a video course in Feb-2017.

(Face-palm...)
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Locomote

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
362%
Feb 10, 2017
86
311
Canada
Watch this 6 minute video if you do any paid advertising, or are considering it.



EXAMPLE

You're spending $100 a day for 100 clicks, and making $50 revenue from 2 sales.

Metrics:
Cost = $100
Clicks = 100
Sales = 2
Revenue (Earnings) = $50

Calculated metrics:
Profit = -$50

cost-per-sale = $50
revenue-per-sale = $25

Or another way:
cost-per-click (CPC) = $1.00
earning-per-click (EPC) = $0.50

You're losing money. So drop bids until your CPC is $0.50. Then you're running breakeven. (This assumes the traffic quality remains constant and doesn't get worse.)

You'll lose ad position, and your Impression Share and ad CTR will both drop.

I'd guess you'd end up with a quarter to an eighth the volume of inbound clicks. So about 12 to 25 clicks.

So you're break-even, but have lost volume.

Now get into a continuous cycle of fixing leaks in your funnel, and increasing visitor life-time-value (LTV) so that your EPC increases. Each time you do that, you can increase your bids and drive more volume.



Apart from the initial budget to buy data and determine your EPC, there really is no reason to lose any money.

You just keep dropping bids till you're break-even or are profitable.

You may have to drop them so low you get no volume... in which case you get no clicks, and therefore have no costs anyway.

This is gold @Andy Black you should add this video to your Adwords course.
 

Andy Black

Help people. Get paid. Help more people.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
374%
May 20, 2014
17,809
66,563
Ireland
This is gold @Andy Black you should add this video to your Adwords course.
Thanks @Locomote

I think it should be part of a free course to get people's head in the right place.
I'm tentatively thinking it should be called "The AdWords Mindset" to go along with "The AdWords Jumpstart".
Maybe some 5-10 part daily email course or something.
 

NMdad

Gold Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
223%
Aug 6, 2017
612
1,367
New Mexico
Such a concise, well-explained video.

Increasing RPC by focusing on LTV reminds me of Jay Abraham (Getting Everything You Can Out Of All You've Got).
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top