ROI Math: Should you Pay for Traffic or Conversion Optimization?
Should you be paying for ads that drive more traffic to your landing page or increasing the chance that your existing visitors convert? Or both? Or neither? What’s going to give your business the best ROI?
Online marketing is about calculating your business’ investment and calculating the return you’re getting from that investment. This article will help you assess where to put your money, and how to calculate your business’ return.
Let’s get rolling!
For those wondering about calculating your marketing ROI, here’s how it works:
So, if you invested 1000 dollars in online marketing, and generated 3000 dollars of revenue, your ROI would be 2.
Here’s a hypothetical:
Let’s say you’re an e-commerce site, selling hand-made shoulder bags for men (average purchase value $50). Let’s say your page converts traffic at 10% (provided you have any).
Let’s say you start advertising online, with an ad budget of $750/month.
This starts to drive visitors to your landing page at a rate of 1000/month. Your page starts to generate sales to the tune of $5,000 (or $4,250 after costs).
Let’s show the math and, more importantly, the return on investment:
Let’s say you like those results, but want to push it forward.
You decide to pay a monthly fee of $100 for an optimized landing page.
Your page starts to convert leads at 15% instead of 10%. Your page is now generating sales to the tune of $7,500 (or $6,650 after costs).
Again, let’s show the numbers:
Is that as far as we can go, or is there more?
There’s more, and here’s where you hurdle your competitors…
You look at your statistics, and hate that 85% of your landing page traffic is bouncing, never to be seen again.
You decide to engage in a retargeting campaign, paying $300/month to recapture landing page visitors who bounce before converting. Let’s say that 10% of your retargeted visitors return to your page and convert.
Let’s show the math, one last time:
Now, these numbers are pretty simple and straightforward, but they illustrate a point:
There’s no reason to optimize a landing page if you have no traffic going to it, and there’s no reason to drive traffic to a landing page if the page isn’t going to convert them.
_ Here’s what I recommend : There is a peak landing page conversion rate your business will find. You will be far better off (and get a higher ROI) devoting time, energy and resources to drive more traffic to that landing page than you would be struggling and throwing money to find another half a percent. Once your landing page plateaus at a reasonable conversion rate, leave it be and start putting your energy where it’s most useful._
What does all this mean for your campaign?
It means that you need to think about your online ads and your landing page as two parts of a whole. A synopsis:
Drive traffic with Facebook and Google Advertisements focused on a single “Ask” (buy this jacket, start a free trial, register for a demo, download this ebook, etc).
Collect that traffic in an optimized landing page with the same single “Ask”.
Recapture traffic that bounced from your landing page with retargeting advertisements, also focused on your same “Ask”.
But doesn’t that mean that I need to create an ad, landing page and retargeting campaign for each and every one of my business’ “Asks”?
Yep. Why do you think businesses with 51-100 pages on their site generate 48% more trafficthan companies with 1-50 pages?
Optimizing your ads without optimizing your page (and visa versa) is a waste of time and resources. Doing both (as we’ve seen mathematically proven above) is how to find success online.
You’ll increase conversions across the board by optimizing your landing page and then designing your online advertisements with that design in mind. People get thrown off when the variables within your campaign don’t match each other.
Consistency is everything
When you start thinking about your online ads and landing pages as a single campaign with one focus, you need to make it easy for people to know they’re in the right place, the whole time.
Use the same USPs, value props and benefits to ensure your traffic doesn’t get lost or confused
Use the same image (especially on a retargeting ad) as it will increase brand recognition
Use the same font, color, and any other variable you can think of to keep your traffic comfortable
When creating your landing page with a Google Ad, remember that Google takes into account the page your ad sends traffic to when it’s determining your quality score. One of the primary variables in this is the trustworthiness of our site. In other words, Google won’t post your ads if you’re sending people to a less-than-legitimate site or advertising something you’re not selling.
How to make Google trust you (and your landing page):
Include your contact information
Include an “About us” section (Google will see it)
Include a map or brick-and-mortar address
Match your meta tags keywords to your ad keywords
Match your image’s alt tags to your ad copy
Use clear and consistent title tags so Google knows your page is relevant to your ad
For more on Google Ads and Landing Page combinations, check out my colleague Krista’s article “ 21 Ways: How to Create Landing Page/Google AdWord Combos That Convert”
For more on Facebook Ads and Landing Page combinations, check out my own article “ 4 Ways to Create Facebook Ad and Landing Page Combos to Maximize Conversions”
Hopefully that gives you a better idea of the concrete value of online marketing, and how important calculating ROI is for your business.
There’s nothing more essential to a small business than knowing the real-world value of your hard-earned marketing budget, and there’s nothing more exciting than seeing, in concrete terms, how you made ten dollars from spending one.