Not solely is spending a portion of your advertising and marketing funds on touchdown pages useful to your backside line, there’s a approach to predict how a lot try to be spending to optimize your Value Per Acquisition (CPA).
And at this time I’ll share that with you.
Conversion Economics
At this time I’ll expose precisely how a lot of your advertising and marketing oyster ought to be shucked off on these slippery little suckers we name touchdown pages.
(If I’ve received you pondering of the scene in Fairly Lady the place Julia Roberts flips a snail off the desk, then you realize I’m adequately controlling your ideas).
How a lot of your advertising and marketing funds do you have to spend on creating and optimizing touchdown pages?
In response to info from Omniture (a world chief in net analytics), you’ll be able to obtain a 25% enchancment in conversion charge through the use of a promotion-specific, standalone touchdown web page (vs. sending paid search guests to your homepage).
Assumptions: Taking 25% as our base conversion enchancment worth, let’s additionally set $10,000 as our month-to-month advertising and marketing marketing campaign funds.
Decreasing Your Value Per Acquisition (CPA)
Our objective is to investigate the impact of taking a portion of the month-to-month advertising and marketing spend and utilizing it to pay somebody (anybody actually) for the aim of conversion charge optimization (CRO).
In the event you assume that 100% of the funds is spent on producing visitors by way of paid search (Google AdWords on this instance), what occurs if you scale back that quantity? Clearly the visitors will drop in direct proportion to the drop in funds.
Now, what if you happen to spend 10%, 20%, 30% of your funds on optimizing your touchdown web page as an alternative of paying for visitors? On this case, 10% equates to $1,000, which can purchase you a few days of concerted effort towards enhancing your touchdown web page.
What impact will this have in your common CPA?
Discovering Your Candy Spot
The desk under reveals what occurs if you begin taking money away from visitors to place into enhancing your conversion charge by way of optimization methods, and the way a lot cash try to be throwing on this path.
| $10,000 | $0 | $10,000 | $0.40 | 25,000 | 1.00% | 250 | $40 |
| $10,000 | $1,000 | $9,000 | $0.40 | 22,500 | 1.25% | 281.25 | $35.56 |
| $10,000 | $2,000 | $8,000 | $0.40 | 20,000 | 1.50% | 300 | $33.33 |
| $10,000 | $3,000 | $7,000 | $0.40 | 17,500 | 1.75% | 306.25 | $32.65 |
| $10,000 | $4,000 | $6,000 | $0.40 | 15,000 | 2.00% | 300 | $33.33 |
What does this inform us?
What these numbers say is threefold:
- Spending a portion of your advertising and marketing funds on Conversion Charge Optimization (CRO) will yield a decrease price per acquisition for every buyer.
- There’s a restrict (or candy spot) to how a lot money you must allocate into this endeavor.
- On this instance the candy spot happens when you find yourself spending 30% of your funds on optimization. Spend any extra and the CPA climbs because the loss in visitors catches up.
Discovering the candy spot in your CPA…
Your individual non-public candy spot (?) will rely on how profitable your CRO efforts are, maybe you’ll solely obtain a 5% improve per $1,000 spent. The one distinction is that you just’ll have a distinct chart and a distinct candy spot. The vital factor to be taught right here is that there does exist some extent the place you optimize your expenditure primarily based on optimization efforts.
Discover your candy spot and you discover the important thing to a minimized CPA.
Now ain’t that candy!