The math doesn’t work. Sometimes marketing is just that simple.
The client wanted the campaign to generate a million dollars.
The client wanted to spend $1500 on the service provided and $500 in ads.
Let’s play this out.
The client is $2000 in on marketing expenses.
At $500 in advertising, the client can expect about 250 people to land on the campaign landing page.
The campaign landing page converts at 2%.
That means that 5 people will purchase.
The average purchase price is $20.
The client is bringing in $100, but is putting out $2000.
The math doesn’t work.
Here’s the formula to assess how a campaign is performing.
service + advertising costs = COGS
advertising spend / number of users landing on site = cost of traffic
site traffic x conversion rate = number of conversions
conversions x average purchase price = top line revenue
top line revenue – COGS = return on marketing investment
Give a thumbs up if this marketing math could have saved you thousands.