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Continuing with example, number of people who view banner ad and actually click on it over to your site is click-thru number. The click-thru percentage is ascertained by dividing number of click-thrus by number of page visits. For example, if 50 people clicked-thru to your site from banner, and there were a total of 1000 banner views (because there were 1000 views to that page that had banner ad on it), then equation would be 50 divided by 1000, or 5%. (You could also use unique visits to calculate this percentage: 50/800 = 6.25%.)
Leads acquired is how many people actually filled out a form on your site or called as a result of banner ad. In other words, user saw banner ad on another site, clicked banner thru to your site, and then actually gave you their information via a web form or phone call.
Cost per lead is very important. The lower this is better. You calculate this by dividing total cost by number of leads, in this case $500 divided by 20 leads, or $25 per lead.
The lead conversion rate is percentage of new leads you obtained from visitors driven to your web page as a direct result of banner ad. Of course this page needs a call to action in order to convert a visitor to a lead. A call to action is a statement on page that says “Call today” and gives a phone number or is a link that points someone to a web form.
If your banner ad cost $500 and you got 20 leads (leads acquired), then your cost per lead for this banner ad campaign was $25.
If 2 people out of 20 new leads actually bought your product or service, then your lead to sales ratio is 1/10 or 10%.
Obviously, whole point of all this is to increase last number, our final sales. By monitoring all these numbers continuously and systematically, we can gain an almost omnipotent view of our various e-marketing campaigns. We can then leverage that knowledge to improve each initiative to yield best results.
Look for Part 2 of this two-part series. It will explain how to get all initial web statistics to plug into these formulas. It will also describe a great method for obtaining accurate click-thru numbers.
Good luck number crunching! The better you get at it, more sales you’ll create.
Jason OConnor is President of Oak Web Works The synthesis of Web marketing, design, and technology Jason is a Web development expert, e-strategist, and e-marketer who is trying to affect the future of the Internet in a highly positive way
mailto: email@example.com for a FREE site consultation and to learn how to increase your bottom line by properly leveraging the Web