Return On Your Advertising Investment


Increase your profits

  • 1. Increase your profits by using conversion tracking to make more lucrative advertising decisions
  • 2. Save time by using new tools that make it easier to achieve your desired ROAI

What is conversion tracking?

In online advertising, a conversion occurs when a click on your ad leads directly to user behavior you deem valuable, such as a purchase, signup, page view, or lead. Sponsored Link Management has developed a tool to measure these conversions, and ultimately, help you identify how effective your SLM Online Advertising ads and keywords are for you.

SLM Online Advertising Conversion Tracking works by placing a cookie on a user's computer or mobile phone when he or she clicks on one of your SLM Online Advertising ads. Then, if the user reaches one of your conversion pages, the cookie is connected to your web page. When a match is made, Sponsored Link Management records a successful conversion for you. Please note that the cookie Sponsored Link Management adds to a user's computer or mobile device when he or she clicks on an ad expires in approximately 30 days. This measure, and the fact that Sponsored Link Management uses separate servers for conversion tracking and search results, protects the user's privacy.

How can conversion tracking benefit me?

When you have access to conversion data in your reports, you can make smarter online advertising decisions, particularly about what ads and keywords you invest in. Given better data, you can better measure your overall return on advertising investment (ROAI) for your SLM Online Advertising campaigns.

For example, John owns an business that sells legal forms online. He knows how many clicks his SLM Online Advertising campaign gets, but would like to know specifically which keywords are converting to sales. With basic conversion tracking, John can get this valuable information. With customized conversion tracking, he can also report the dollar amount of each sale and get the total revenue generated by each of his keywords as compared to the total cost of the keyword.

With conversion statistics, John discovers that the keyword "divorce forms" has a return on advertising investment (ROAI) of 500%. Consequently, he optimizes his campaign by increasing the spend on that keyword, thus maximizing his SLM Online Advertising ROAI.

Return on advertising investment (ROAI)

Return on advertising investment (known as ROAI) is the ratio of the cost of advertising relative to the profit generated from conversions such as sales or leads. Your ROAI indicates the value to your business gained in return for the cost of your ad campaign.

Although exact measurement is nearly impossible, you can help assess the ROAI of your campaign by using these calculations: take your revenue from sales, subtract your advertising costs, then divide by your total advertising costs.

(Revenue - Cost) / Cost

For example, say you want to drive users to your website in order to generate sales for your widgets, which results in a profit of $10 per widget sold. You invest $1000 in your ad campaign for the past week, and as a result, you sold 130 widgets. Your revenue from sales or total profit is $1300 ($10 profit multiplied by 130 units). Thus, you subtract the $1000 cost of your ad campaign from your $1300 profit to receive $300. The $300 amount is profit returning to you as a result of your initial $1000 advertising investment. Your ROAI, expressed as a percentage of your initial investment, would be 30% (300/1000, multiplied by 100).

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