Question

Hi everybody!  What do you guys use as key indicators that tells you to raise your budget to get more conversions?Hi everybody! What do you guys use as key indicators that tells you to raise your budget to get more conversions? We cut our budget due to the current crisis with 50% so we can save when things get back on their feet. However, results are still really good. So I am in doubt wether to raise our budget again. Cheers, Wouter

Answer 1

Don't just lower your budget because 80% of the companies do it right now. If you see great results, why not grow instead? Are you in e-commerce or SaaS? If so, determine ROI and use that + ROAS as KPI. If you are in a B2B or a service-related industry, go find out what the average order value and conversion rate from click to sales are to determine a maximum cost per acquisition (CPA). As long as you're reaching the desired ROI or CPA, you should be able to spend whatever you want (though that's not always how budgets work for companies, of course).  

Answer 2

What is a conversion worth on the long run? Do they lead to recurring revenue?  

Comments

Really depends on the type of company we convert. For april so far 50% of the conversions will lead to recurring revenue. The rest are 'micro' customers we are only losing money on.  

Answer 3

Spend to what is acceptable. If you are seeing good results look at impression share lost due to budget to look st scaling up opportunities. Bonus points if you track LTV/predicted LTV at campaign and keyword level to increase in the most successful areas

Answer 4

ROI This is not valid reasoning: "We cut our budget due to the current crisis with 50% so we can save when things get back on their feet. ". You should cut budget when the ROI is negative, not because there is a crisis. Also you shouldn't cut budget, as in daily budgets, but rather lower CPC's IF your conversion rates are dropping. Also 50% seems random - why 50%? Measure the impact of the crisis on your conversion rates and adjust bids accordingly. "However, results are still really good. So I am in doubt wether to raise our budget again. " Stop guessing and doubting - start focussing on ROA.  

Comments

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