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Unlike other enterprise-wide applications intended to improve the bottom line, corporate portals tend to live up to vendor’s promises and, more often than not, begin to save companies money as soon as they go live.
According to a just-released Delphi Group study, only 2% of portal installations failed to return any ROI. This compares very favorably to CRM installations, which, by some analysts estimates, fail 40% of the time.
The Delphi report, which looked at hundreds of installations, found that 22% of firms reported ROIs between 21% and 50%, while 18% of installations returned over 100%.
But, as with most IT implementations, there is a caveat emptor: poor planning prior to installation will negate management’s reasons for installing the portal in the first place and probably lead to poor ROI.
“Whenever my clients come to me and ask me ‘Who do we pick for portal technology?’ I’m like, ‘Back up a second,’” said Laura Ramos, an analyst with Giga Information Group. “‘Let’s talk about what the portal is going to do.’”
The are at least three things that must be decided prior to picking a vendor, said Ramos. One: what problems will be addressed or solved by installing a portal? Two: what is the state of your current IT infrastructure? (A grandiose vision of an enterprise-wide portal probably won’t work on 23 un-networked, proprietary databases.) And, finally, how will you measure the success or failure of the installation?
This last decision may be the most critical. “When you ask people to talk about what it is they’re going to measure they start to get real clear about what is important in a portal and what isn’t,” said Ramos.
Nathanial Palmer, vice president, chief analyst and author of the Delphi Group study, found the highest ROI comes from a well-planned implementation strategy with relatively simple goals like eliminating excess paper work and printing. “By in large the greatest value came from fairly prosaic applications,” said Palmer.
AmeriKing, the largest franchisee of Burger King’s in the country with 376 restaurants and 13,000 employees, for example, saves over $192,000 per year through volume discounts on office supplies by incorporating a centralized purchasing function into their franchise-facing portal that allows its store managers to buy from Boise Cascade’s online store.
At many corporations some of the biggest savings come from the integration of intranet web sties onto shared Web and application servers, said Nate Root, a Forrester analyst. This simplifies IT’s job and reduces the need for extraneous hardware and software purchases, and maintenance costs.
“Going into a portal effort a lot of companies have dozens or hundreds or even thousands of different intranet sites and, by putting a portal in place, they can consolidate all that and get rid of all that old excess infrastructure,” he said.
Hewlett-Packard, for example, consolidated some 1,200 intranet sites when the company instituted its portal project, Root said. “They built up over time because it was so easy to put a Intranet site up.”
Savings can be further enhanced through the use of single-sign-on and authentication tools. When Verizon was consolidating GTE and Bell Atlantic, the company discovered 60% of internal helpdesk time was spent answer password questions, said Root.
“From an access perspective,” said Robert Lancaster, senior analyst at the Yankee Group, “providing single-sign-on through a portal environment relieves a huge amount of IT strain purely because people only need to remember a single password for up to a dozen applications.”
Finally, from an IT perspective, portals are relatively simple installs. ‘Simple’, of course, is defined by the scope of the implementation, but most IT departments can handle the technology with relative ease. Problems tend to creep in from the non-IT issues such poorly thought out usability or taxonomy (the portal’s organizational hierarchy) issues, said Giga’s Ramos.
“A portal is a glorified Web server when it comes down to it, with a little bit of custom application server type development and a little integration work but its nothing that the IT shops that are out there now can’t handle,” agreed Forrester’s Root. “Nine times out of 10 its organization and content, and that kind of stuff that gets in the way.”
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5 Questions to help set, manage and review your content marketing effectiveness
As we accept that our consumers are learning about, and navigating through, more and more information about our brand, organisation, industries or topic areas as they research online, we’re needing to deploy more sophisticated strategies in order we can earn attention, and importantly trust. This is what sits behind the drive of content marketing’s rise to the forefront of the digital marketing agenda.
Content marketing is starting to mature, too. More and more reports, such as this from the Aberdeen Group, illustrate this, here too.An easy start-point
Below is a simple matrix of ideas to help you set the KPIs or metrics based on what we’ve used on different projects. We’re not saying “this is the way you must do it” or that you need to use all of these KPIs. Instead, we hope this is a useful framework to help select the best type of KPIs for different markets.
We’ve taken three angles here to illustrate, so we’ve got the full range of measures covered from hard sales vs softer engagement metrics.
Using these different types of measures is even more important for companies with long purchase or repeat purchase cycles, such as automotive, furniture or maybe PCs – and certainly for B2B businesses. The longer buy cycles require the need to demonstrate ongoing engagement.
Brand measures: These are easier for bigger brands or where there’s less competition, simply because the tools seem to work better in that space. Think brand or key-phrase mentions, sentiment, share of market mentions over competitors and certainly site traffic. These are the bigger needles to get moving and often require a bit more momentum.Combining measurements and social media optimisation
Brian Solis talks about SEO + SMO = Amplified Findability in the traditional and social web. I think that’s a great way to summarise it [Dan – like that although I’d call it Amplified Visibility FWIW – for me Findability is about efficient customer journeys on websites – it’s a user-centred design technique, but I guess Brian doesn’t know about that!).
Given that social objects are contextualized through keywords, titles, descriptions, and/or tags so the measures here are not so different to SEO in terms of inbound links, as well as referring web sites where your content, the social objects, are placed. So you need to develop an analytics dashboard that reviews your effectiveness within this content eco-system.
Recommended Guide: Guide to Content Marketing ROI
Learn how to use analytics to PROVE the value from your content marketing
Download our Content Marketing ROI Guide.Actionable analytics for content marketing
Following on from the above table, these measurements are great and you also have to be able to do something with them. The analytics guru’s like Avinash Kaushik, and of course Dave Chaffey 🙂 will always talk about actionable metrics. How might that apply to content marketing, here are a few examples of questions to ask for which you need to review the analytics to get the answer:
Q1. Which keyphrases related to content are most effective at driving visits and outcomes? Ensure that you have an idea of what audience personas or segments whom those keywords relate to as well, so you know who you’re writing content for. Build on the keyphrases that are most effective. When you identify high bouncing keywords try surveying those users on exit or placing calls to action directly on the page to ask for feedback, tools like Kampyle can help with that.
Q4. Are we increasing the % of engaged users? Engagement can be short or longer-term – it might be that someone has viewed more than 3 pages on the site, per session, this is better than time on site. You can consider improving that by designing site journeys that are for specific audiences and creating multiple routes to the important content.
Q5. What are the satisfaction ratings for our content? Use different customer feedback software like 4Q and Kampyle so you get overall ratings of your content and feedback on specific content. 4Q is great since it shows you what people were looking for against what whether they were successful and how satisfied.
The general rule of optimisation is to monitor and test and don’t stop! Websites and web based content are not brochures, they’re never ‘done’. Focus on testing and trying new things where the analytics and customer feedback data indicates the best opportunity to improve.
According to the researchers, Starlink has a “huge potential for military applications”. Thus, they recommend countermeasures to surveil, or destroy the growing satellite megaconstellation. The original manuscript is in Chinese. However, you can get a translated copy of the paper published in the journal China’s Modern Defence Technology here.
Elon Musk’s SpaceX is in charge of Starlink which is a broadband satellite internet network. It provides internet access to users irrespective of their location (anywhere globally). However, to use the Starlink network, the user will need access to a Starlink satellite dish. Back in 2023, the company launched its first satellites. Since then, it now has no less than 2300 satellites in low-Earth orbit worldwide. However, the company is planning to form a gigantic megaconstellation with no less than 42,000 satellites. China does not like this and will seek to stop it.Starlink military power
Specifically, the researchers have concerns about the military capacity of this constellation. According to them, the U.S. will eventually track hypersonic missiles with this system. It will also boost U.S. military capacity and transmission speeds of U.S. drones and fighter jets. Furthermore, this megaconstelation could be a threat to Chinese satellites.
Last year, China wrote to the U.N complaining that Starlink satellites are an obstruction. China had to perform complex maneuvers to avoid “close encounters” with Starlink satellites last year.China’s alternatives
Below are a couple of methods that China already has for disabling satellites
Microwave jammers: These can disrupt communications or fry electrical components
Powerful, millimeter-resolution lasers: These can blind satellites using high-resolution images
Cyber-weapons: Directly hacking into satellite networks
Long-range anti-satellite (ASAT) missiles to destroyGizchina News of the week
Join GizChina on Telegram
“The Starlink constellation constitutes a decentralised system. The confrontation is not about individual satellites, but the whole system,” the researchers wrote. They recommend “low-cost, high-efficiency measures” to attack Starlink system. However, they did not specifically mention the measures.
In addition to bringing down the Starlink satellite system, the research proposes that China has its own spy satellite system. Whether or not this will involve the deployment of lasers, microwave weapons, or smaller satellites to counter the Starlink satellite remains to be seen. Furthermore, China wants to directly compete with Starlink. It will launch Xing Wang(or Starnet), a satellite system like Starlink. This system like Starlink will provide internet access to users globally. However, you can be sure that the U.S. and its allies will not permit this system.Starlinks and military involvement
We can all imagine why China has concerns over Starlink military links. Recall that just two days after the commencement of the Russia – Ukraine crisis, Mykhailo Fedorov, Ukrainian Vice Prime Minister wrote on Twitter asking Musk to deploy more Starlink satellites to Ukraine. At the moment, SpaceX has so far deployed over 12,000 Starlink satellite dishes to Ukraine. Furthermore, “all critical infrastructure [in Ukraine] uses Starlink.”
A direct missile attack on the Starlink satellite will not be ideal for China. This is because of the risks that it poses. Direct missile attacks will create hazardous conditions for all nations operating in space including China. Furthermore, explosions in space are very dangerous because of the debris (thousands of them) which could fall anywhere. A single piece of debris could be as large as a basketball and could also be as small as a grain of sand.Bringing down satellites is very complex
All the explosions in space have had very negative ripple effects and nobody wants that, not even the U.S. Certainly not China or even Russia. According to reports, all the explosion tests in space by the U.S., China, India, and Russia have all created space junk. Subsequently, some of these countries had to ban such tests. However, a few months ago, Chinese scientists claims to have a way to avoid the debris problem. Their method claims to have a pattern of containing the debris by packing the explosive device in a satellite exhaust nozzle. Thus, China claims it can blow up the satellite without creating a mess with the debris.
A report from the U.S. Department of Defense claims that China’s technology on satellites since 2023 is now doubled. While the U.S. has 2944 satellites (2300 are Starlink’s), China is second globally with 499. Although China is still a far cry from the U.S. in terms of satellites, the U.S. will not like the speed of Chinese development.
Battlefield 2042’s Portal platform is what super-fans like me have been waiting for
Last month, we heard a rumor which claimed that one of Battlefield 2042’s unrevealed modes was actually a sandbox mode that would let players combine different Battlefield eras. Today at EA Play Live, EA and Ripple Effect – the new name for DICE LA – revealed exactly that. The new mode is called Battlefield Portal, and it’s described as “a love letter to fans and creators.”
EA and Ripple Effect have published a lengthy blog post to the Battlefield website with details on Battlefield Portal, but the short and sweet of it is that Battlefield Portal is a mode that will let you customize most things about a match. For example, you can pit different factions against one another, customizing their weapons and vehicles. You can also change movement settings and remove things like going prone or aiming down sights.
Battlefield Portal will pull components from three different games from the franchise’s past: Battlefield 1942, Battlefield: Bad Company 2, and Battlefield 3. In addition to those three classic games, you’ll also have the content in Battlefield 2042 available to you in Battlefield Portal. Players will create “experiences” using components from all four games that other players can join. When creating those experiencing, players can run either custom matches or use preset modes like Conquest, Team Deathmatch, or Rush.
You’ll be able to follow creators you like and hop into their games when they’re hosting them, while creators will have some admin tools available to them that let them ban usernames across all of the experiences they create. Ripple Effect even says that it will feature popular experiences in official playlists, so if you make a good one, it could end up in front of a lot of eyes.
For those who have experience with visual scripting logic, there will even be a Logic Editor they can use, allowing for more granular changes that the settings menu can’t accomplish on its own. So, for those who want a lot of control over what happens in their custom game modes, it sounds like they’ll have the tools to get there.
Ripple Effect says that there will be six fully reimagined maps launching with Battlefield Portal. From Battlefield 1942, we’ll see Battle of the Bulge and El Alamein. The two maps from Battlefield: Bad Company 2 are Arica Harbor and Valparaiso, while finally, we’ll see Caspian Border and Noshahr Canals from Battlefield 3. In addition, Ripple Effect will be bringing back various weapons, gear, vehicles, and soldiers from those games, including the M1 Garand, the M416, the Spitfire, and the B17 Bomber.
While EA and Ripple Effect confirmed a lot of details about Battlefield Portal today, there’s still more to come, as the two companies say that progression will be detailed at a later time. For now, hit the link above to read everything that’s been revealed so far. We’ll let you know when more is announced, so stay tuned for that.
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Get easy tips for planning an office makeover. Find out what to consider before making a plan to decorate your home office.
You might also like these tips for planning a room makeover.
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We recently started a really fun project. It’s our first big project in our Florida house, so it’s even more special.
Although we’re mostly unpacked and settled in, we’re still experiencing growing pains from the move. There are a lot of things that we had figured out in our last home that we’re struggling with here.
I’m really missing my basement office/craft room set up. I currently have my office set up in the front living room. It’s large and bright, but it’s also in the middle of the most used part of the home.
My husband works from home and my kids are homeschooled, so it’s not a very quiet area. I mean, I love having them home, but also, I need a space where I can work in quiet.
So I decided to take over what we lovingly call “the pink room.” This room is at the back of our house and we assumed it had been a laundry room at one time.
We used it for storage until a few days ago. Don’t want to unpack that box? Put it in the pink room. Not sure where to put those pool floaties? Pink room!
It’s a small room, but it has a lot of potential.
We recently removed all of the cabinets and the countertop to give us a blank slate.
I’ve done a few repairs and painted the room so far.
My craft area will stay in the front room of the house and I will be sharing a really fun project for that space soon.
Psst: I just finished this room. Check out my moody boho office here.Tips for Planning an Office Makeover
Your home office should be an inspirational room to work in. Here are my tips for getting started with your plan.Decide What You Need
Before you get started, make a list of what your office needs.
Here are some things to think about:
What needs to be in the room? For an office, you will need a desk and chair, but you might also need room for things like printers or a Cricut. Do you have a ton of books that you want to bring in? Are there things that aren’t office related that need to be stored in this space?
Dark or light? Darker colors can be more soothing to look at, but may feel dreary in some environments.
What is missing from your current set up? Is your desk too small? Does the glare from the window bother your eyes? Wish you had more privacy?
Determine your style. Do you like clean, minimal design or a more colorful, boho look?
Think about how you’ll use the space. If you’re the kind of person who prefers to use a laptop on the sofa, plan for that. If you need space for crafting, add that in. Make your space work for YOU.Plan for Plenty of Storage
Offices require so much stuff. Personally, I love desks that have drawers to hold stuff like pens and tape.
If you deal with a lot of paper, you will need a filing cabinet of some sort. You might also want a bookcase.
Do you like open or closed storage? Some people prefer to look at everything and find it inspiring? Others prefer a cleaner environment and everything behind closed doors.Comfy Seating is a Must
If you’re anything like me, you sit for an embarrassingly long time. Save your back with comfy seating.
Make sure that it doesn’t cut into your legs when you sit for too long. A lot of dining chairs are guilty of this.
The height of the chair is also important. Make sure that it’s the right height for your desk and for your size. (Taller people are going to be more comfortable with a higher chair.)
If you like sitting with your legs tucked under you, make sure that the chair is large enough for this. (You will also want to avoid desks with center drawers.)
I also prefer a footstool for when I don’t sit with my legs up. It makes sitting a lot more comfortable.Choose Good Lighting
If your room doesn’t get good natural light or if you work at night, make sure that your room is adequately lit.
For small spaces, overhead lighting might do the trick. For a cozier feel, sconces will probably work better.
Ironically, most desk lights have the worst lighting and are far too bright.Make Sure that You Have Enough Outlets
Electronics require so many outlets, so make sure that you have enough. If possible, hire an electrician to add more to the space before you get started.
If that’s not possible, add power strips, being careful not to overload them. I like using them for electronics that I don’t use all the time, like my Cricut.Surround Yourself with Inspiration
Bring some beauty into your space in whatever way that makes you happy. I plan on bringing in fun wallpaper, plants, photos, and vintage art.
A bulletin board is another great way to bring in inspiration. Fill it with inspiring images, paint swatches, fabric samples, or whatever makes you happy.My Planning Process
When I plan any room makeover, I like to look at what I’m working with, what I want, and what I need.
To simplify this process, I use my printable decorating workbook. It contains everything needed to plan a space.About the Room
This space is roughly 6.5′ x 8′ with a door that goes to the back patio. I’m looking to make it into a quiet, but inspiring place to write.Colors and Style
Muted mid-toned green with patterns. I need the color to be easier on my eyes (literally) and calming, so I’m going with a blue-green shade that’s a little darker than I normally go for.
My current office space is at the front of the house, which gets way too much light. I underestimated the Florida sunshine, I guess.
Every morning, my eyes feel like they’re working too hard because it’s so bright, so I’ve researched to find out what colors are the gentlest on your eyes in an office.
I learned that greens and blues are the best colors for an office. Mid-tones to darker colors are the most gentle.
We painted the room in the color Mattasaurus Rex by HGTV for Sherwin Williams.
I also chose this fun wallpaper (it was my starting point.) I love the colors and the pattern. It will provide a nice backdrop for my computer and be visually inspiring.Likes and Dislikes About the Room
I like that the space is cozy and tucked away at the back of the house. The pocket door is one of my favorite features.
I hate the popcorn ceiling (spoiler alert, I removed it.) And I hated the cabinets, which I also removed to create a blank slate. We removed the fluorescent light.
I hate the back door and want to replace it eventually, but for now, I’ll just repair the holes and paint it.Needs and Wants
I need to get an electrician in to make the wiring the proper configuration to hold a light. Since we’re not using the sink, I also need to get a plumber in to cap off the sink pipes.
I also need a bit of storage for BBQ tools since the door goes outside to the grill. Obviously, I don’t want to look at them, so it needs to be closed storage.
I want the room to have a long, wall-length desk so that I can spread out instead of being cramped up on a small desk.Inspiration Starting Point
This wallpaper was my starting point. I’m obsessed.Mood Board
Here’s my design plan:Timeline
We’re in the middle of birthday season, so we’re pretty busy. I’m hoping to finish by the end of March 2023.To-Do List:
Patch the floor and baseboards
Get a plumber to cap pipes off
Get an electrician to fix light
Build other Alex cabinet
Figure out and install storage for BBQ tools
Repair screw holes and paint door
Paint pocket door
Here’s how it’s looking right now. I’m so excited to get this space finished!Shopping List
I still need to buy a ceiling light, desktop, shelving, rug, storage, and blinds.
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Emy is a vintage obsessed mama of 2 DIYer who loves sharing affordable solutions for common home problems. You don’t need a giant budget to create a lovely home. Read more…
“Am I profitable?”
It’s a question every PPC account manager is asked, but it’s also a question many account managers struggle with answering.
PPC marketers aren’t necessarily statistics wizards or mathematically oriented by nature, and there can be many factors that affect overall profitability.
While understanding Google Ads and the auction process at a deep technical level is crucial to the success of any campaign, understanding a business’ financial metrics is just as important – and it’s increasingly becoming more so.
Gone are the days where PPC was really the only place to put your money.
Now there is Microsoft Ads, Facebook Ads, Snapchat, Instagram, and the list goes on and on.
Money is diversified to many places, and there’s no silver bullet for attributing every dollar spent.
The best we can do is use some math as our guiding light.
Grasping the financial metrics will make you a better media buyer, and give you better results long-term, whether you’re in-house or agency side.
These calculations can feel daunting for some managers, but mastering these will put you miles ahead of most PPC managers in both knowledge and practice.1. Determining ROAS
People interchange ROAS and ROI often, but they are not actually the same thing.
The difference between ROAS (return on ad spend) and ROI (return on investment) is whether you account for a company’s cost of doing business (often referred to as COGS – cost of goods sold – or profit margin).
When you talk about ROAS, you’re looking at PPC profitability in a linear way.
When you talk about ROI, you’re looking at your PPC spend in a multidimensional way.
ROI tries to answer this question:
In this example, let’s say you sell shoes for $50 a pair. Your ROAS would use the $50 in its calculation.
But, pretend you have a 50% markup on those shoes. That means your total gross profit is actually only $25.
Generally, media buyers rely on ROAS, because they don’t have all the internal calculations feeding into Google Ads that would show them ROI.What You Need to Determine ROAS
Total Conversion Value
Total Cost of AdvertisingFormula to Use
Total Conversion Value / Total Cost of AdvertisingExample
The ROAS would be 2.78 or 278% (48,750 total value / 17,547 Google Ads cost)
You can report back to the client that ROAS for the past 30 days was 278%.Tip
Google Ads actually has a column specifically built for ROAS.
Except Google doesn’t call it ROAS, so you might pass right on by it.
It’s labeled as All conv. value / cost.
If your campaigns are accurately tracking conversion value then you can use this column to calculate your ROAS quickly.
If a site isn’t ecommerce, that means you probably aren’t tracking conversion values for each conversion inside the account.
You’ll need to calculate ROAS by hand using the information your client gives you.
If every conversion is worth the same amount, you can instead assign that value to a conversion type, which would allow you to use that column.2. Determining Break-Even ROAS
ROAS is nice and all, but it doesn’t give you the full profitability picture.
As you saw previously in our shoe example, products cost money to the retailer.
Just knowing your ROAS doesn’t tell you if you are making or losing money overall.
For example, you can have a client whose ROAS is a whopping 400%, but they’re still losing money once you calculate their profit margins.
As a PPC account manager, it’s important to first set a break-even ROAS for your clients.
Every client will calculate profit margins differently (do we include rent in our profit margins calculations or do we not include rent, for example), but determining a basic profit margin is the first step in determining your client’s break-even ROAS.What You Need to Determine Break-Even ROAS
Profit MarginFormula to Use
1 / Profit MarginExample
Let’s say you’re a travel agent that books first class and business class airfare.
Each ticket booked generates an average of $1,600 in revenue.
That’s before the ticket is paid for, though.
About 65% of that revenue goes to the cost of booking the ticket and 6% of the revenue is paid out to salespeople for commission.
First, subtract the cost of the actual ticket. This would be 65% of $1,600, which is $1,040. Subtract that from the $1600 in revenue, and revenue is now down to $560.
Then there’s the 6% for the salesperson, which is 6% of $1,600. That’s another $96, leaving revenue at $464.
Out of the $1,600 in revenue, your client makes a profit of $464.
In essence, your profit margin would then be 29%.
But that’s not the whole picture.
This calculation of profit margin doesn’t include potential costs of doing business like rent, taxes, and other overhead.
And if you’re an agency, it’s not accounting for the cost of you!
This is simply the cost of servicing the booked airfare.
So to calculate your break-even ROAS you simply divide 1 by your profit margin.
1 / .29 = 3.4 (or 340%)
To explain break-even ROAS in a non-mathematical way:
In our above scenario, anything over 340% ROAS, means you are making money.
If it’s less 340% ROAS, you’re losing it.Tip
Some businesses hyper-focus on linear profitability (making more money than they spend after accounting for profit margins).
This can be short-term thinking if their customers tend to produce lifetime value to the business.
Do customers come back and buy again?
Do customers typically refer friends?
Is it a subscription service with a monthly fee, and there’s an average span of subscription time?
Determining the average lifetime value of a client or customer can increase your profit margins and in turn decrease your break-even ROAS.3. Determining Cost Per Conversion for Forms
Many accounts track form submissions as a conversion action in your client’s PPC accounts.
However, attributing a value per conversion is tricky since some form submissions don’t represent any profit or revenue for your client, or the amounts can vary drastically.
As a PPC manager, you want to know what your true cost per conversion is.
In other words, how much you pay for a form submission that turns into a sale or a deal or whatever it is that makes the business money.What You Need to Determine CPA for Forms
Average cost per conversion (cost per form submission)
Average Form conversion rate (the percentage of forms that turn into sales)Formula to Use
Avg. cost per conversion in Google Ads / Form conversion RateExample
Let’s use our travel agent example from the previous formula, but you are tracking form submissions as a conversion action.
You know that your average cost per conversion for your Google Ads is $37.
In other words, you’re generating form submissions at $37 a pop.
You close about 15% of all the forms received through Google Ads.
$37 cost per lead / .15 close rate = $246.67
So, your true average cost per conversion is $246.67, based on that close rate of 15%.
Now, we can calculate your ROI based on the numbers we have above.
Using the calculation for ROI means (profit – cost) / cost.
The numbers work out like this:
[($464 (average profit per conversion we calculated before) – $246.67 (true cost per conversion we just calculated)]/ $246.67 = 0.88.
It may look like that’s a loss, but remember, they are not losing money (ROI could be a negative number).Tip
Now that you know what you’re really paying per conversion, you can identify areas to increase ROI.
For example, increasing the sales team’s conversion rate by a given percentage will decrease their cost per conversion by ‘x’ dollars.4. Determining Break-Even CPA for Forms
We were able to calculate the break-even points for ROAS, but what about in our recent example tied to form submission?
Continuing our conversation from above, you know you’re profitable and that you’re generating sales at a $246.67 CPA.
But how do you know the most you can spend on a form submission without losing money?
But what if you were generating conversions at $42? Would the account still be making money?
Granted, you can plug those numbers into formula #3 — but there’s a better way.What to Use to Calculate Break-Even CPA for Forms
Average profit per sale
Form conversion rateFormula to Use
Average profit per sale x Form conversion rateExample
As we saw above, our average profit per sale is $464 (after subtracting costs for commissions and the cost of booking the airfare).
We also know that 15% of forms close as a sale.
$464 profit x 0.15 close rate = $69.60
In plain English, you can pay up to $69.60 per form submission on average before you start losing money.Tip
Sometimes it’s important to test decreasing profit margins for the sake of increasing volume and acquiring more clients.
Instead of thinking of it as:
“We’re generating form submissions at $37 per form.
Think through this scenario:
“We’re generating form submissions at $37 per form.
At that rate, our ROI is 180%.
But, if we increase our bids, we could generate 20% more form submissions at $45 per form.
Our ROI would drop to 154% but it still gives us a nice cushion below our $69.60 CPA break-even point with higher volume.”5. Determining Break-Even CPA for Complex Sales Cycles
Not all businesses convert their visitors in one linear process.
Long sales cycles can mean multiple touchpoints with a lead or prospect before closing a deal and generating revenue.
For this formula, let’s draw out the scenario first and then figure out the correct formula.
Let’s say you work for a company that sells a monthly subscription to a cloud-based small business accounting software.
Their average customer generates $3,287 over the course of the average subscription length.
Your PPC campaign sends traffic to a landing page promoting a free webinar that explains the benefits and features of the software.
Webinar registrations are as far as your PPC conversion tracking goes!
This is where it’s crucial to know how your sales funnel generally performs.
45% of webinar registrants actually attend the free webinar.
Of those attendees, 15% ultimately sign up for a subscription to your client’s software.
Now you need to work backward on the math to figure out the most you should be paying for a webinar registration from your PPC campaigns.What You Need to Know to Determine Your Break-Even CPA
Average profit per sale
Webinar conversion rate (percentage of registrants that attend)
Sales conversion rate (percentage of attendees that buy a subscription)Formula to Use
(Webinar Conversion Rate x Sales Conversion Rate) x Average Profit Per Sale
The first step in the formula determines our true, or actual conversion rate.
Once we have our true conversion rate, we simply borrow our formula from step 4 and multiply our average profit by our true conversion rate.
Let’s work through the math in our scenario:
(45% of registrants attend x 15% convert to subscribers) x $3,287 lifetime value of a sale = $221.87
Put simply, your break-even CPA for a webinar registrant is $221.87.Tip
Explaining these calculations might feel a little overwhelming, but it can be easier if you walk through it with an example.
Here’s how you’d do it for a scenario where you generated 500 webinar attendees at a break-even CPA of $221.87:
We generated 500 webinar registrants at an average cost per registrant of $221.87. In total, we spent $110,935.
Of those 500 registrants, we expect 225 of them to actually attend the webinar, based on our historic average of 45%.
Of those 225 attendees, we expect approximately 34 (15%) of them to buy a software subscription.
We know that an average customer represents $3,287 in profit.
The above calculation can get more complicated if you don’t know the average lifetime value of a client.
We called it $3,287 just for the sake of this example, but sometimes it isn’t that straightforward.
Work to figure out these numbers so you’ll have a clearer sense of what’s going on, which will empower you to manage a more statistically accurate campaign.Conclusion
Knowing how to calculate these formulas by heart is great.
But being able to explain how they make sense with scenario-based, non-mathematical English is way more important
If the “why” of these formulas makes sense to you, you’ll be able to apply them in different situations no matter what types of accounts you manage now and in the future.
It takes you beyond being a PPC manager and operating as a true partner to the success of a business.
Screenshot taken by author, September 2023
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