Online Advertising ROI Calculator by demandmetric

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									                                                                                                                Online Advertising ROI Calculator

Instructions

1. In Cell C5 of the ROI Calculator tab (below), enter your product's Price.


2. In Cell C6 of the ROI Calculator tab (below), enter your product's Cost of Goods Sold.


3. In Cell C7 of the ROI Calculator tab (below), estimate the percentage of Leads (web visitors) that will convert to sales*


4. In Cell C8 of the ROI Calculator tab (below), enter your Daily Online Advertising Budget.


5. Determine the Cost/Click for your campaign, or use the average for multiple keywords/ads. (Google or Yahoo will provide estimates)


6. In 'Results' section of the ROI Calculator tab, find the row that matches your campaign's Cost/Click.


7. Analyze the Return on Investment for this campaign (Profit/Month & Profit/Year), based on your assumptions.



      * Use historical transaction data to estimate lead conversion percentages, if available.

        If no historical data is available, be conservative and track results monthly to inform future calculations.
                                                                                           Online Advertising ROI Calculator

Assumptions
Product Price                      $990
Cost of Goods Sold                   $0
Lead Conversion %                  0.05%
Daily Advertising Budget            $40



Results
                                                                                              Revenue/
Cost/Click        Daily Budget   Daily Leads   Monthly Cost   Monthly Leads   Unit Sales                 Profit/ Month   Profit/ Year
                                                                                               Month
    0.05                   $40       800          $1,200          24000         12.00          $11,880      $10,680       $128,160

    0.10                   $40       400          $1,200          12000          6.00          $5,940       $4,740         $56,880

    0.20                   $40       200          $1,200          6000           3.00          $2,970       $1,770         $21,240

    0.25                   $40       160          $1,200          4800           2.40          $2,376       $1,176         $14,112

    0.50                   $40       80           $1,200          2400           1.20          $1,188        -$12           -$144

    1.00                   $40       40           $1,200          1200           0.60           $594         -$606         -$7,272

    1.50                   $40       27           $1,200           800           0.40           $396         -$804         -$9,648

    2.00                   $40       20           $1,200           600           0.30           $297         -$903         -$10,836

								
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