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The accuracy of the new ranking
can be demonstrated by measuring the cost per click for each
project. The lower the cost per click, the better the project
performance. Hence, the best project will have the highest adjusted
rate and the lowest cost per click.
Let's assume that we have spent
$1000 on each project. Based on the CPM and actual click-through
rates, project 1 generated 225 clicks ($1000/$340)x1000 x 7.65%).
The cost per click: $4.45.
Similarly, we get :
When comparing the ranking
resulting from the adjustment of click-through rates to the ranking
based on cost per click, we can see that they are identical.
Unfortunately, the majority of
marketing managers still base their decisions by comparing response
rates based on actual click-through rates.
Astute online marketing managers
will quickly point out that it is necessary to take the comparison
activities a step further by also comparing actual sales generated
by each project. Clicks and visitors are just part of the equation.
For most companies, the success of online marketing endeavors
is ultimately measured by their additions to the bottom line.
In such cases, it is critical to incorporate sales figures into
the mix to develop optimal online marketing strategies.
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