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May the Ratio Be With You

1% CTR

10% conversion

1,000 impressions

10 clicks

1 purchase

(CPM)

(CPC)

$20 avg ticket,...
Real-world CTR Test
Click through rates from Adwords ad to product page
Logitech S150 USB Speakers
- 2.28% click through r...
Conversions to Sales
Conversion ratios from clicks to sales, including dollars
Q1 2012 - $208.43
Ordered items: 137
Clicks...
More realistic ratios
from ongoing real-world test since 2007

1% CTR

1% conversion

10,000 impressions

100 clicks

1 pu...
So What?
“In my real-world experiments, run continuously since
2007, CTRs of around 1% are reasonable and
conversion ratio...
Dr. Augustine Fou – Chief Digital Strategist
“I advise clients on optimizing
marketing tactics to achieve
greatest ROI and...
APPENDIX
December 4, 2012.
Airbnb Conversion Funnel

Source: Compete Millward Brown

December 4, 2012.
Booking.com Conversion

Source: Compete Millward Brown

December 4, 2012.
Hotels.com Conversion

Source: Compete Millward Brown

December 4, 2012.
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May the Ratio Be With You by Augustine Fou

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May the Ratio Be With You by Augustine Fou

  1. 1. May the Ratio Be With You 1% CTR 10% conversion 1,000 impressions 10 clicks 1 purchase (CPM) (CPC) $20 avg ticket, 5% (CPA) -1- $1 rev share Augustine Fou
  2. 2. Real-world CTR Test Click through rates from Adwords ad to product page Logitech S150 USB Speakers - 2.28% click through rate - price point: $12 SSD Ultimate Boot Drive - 0.62% click through rate - price point: $250 - $400 Fujifilm Finepix F70EXR Digital camera - 0.92% click through rate - price point: $200 Samsung Ultrathin Bezel LCD HDTV - 0.54% click through rate - price point: $1,999 -2- Augustine Fou
  3. 3. Conversions to Sales Conversion ratios from clicks to sales, including dollars Q1 2012 - $208.43 Ordered items: 137 Clicks: 29695 Conversion: 0.46% Q4 2011 - $414.40 Ordered items: 251 Clicks: 29833 Conversion: 0.84% -3- Q3 2011 - $627.61 Ordered items: 414 Clicks: 37801 Conversion: 1.10% Q2 2011 - $801.25 Ordered items: 510 Clicks: 63878 Conversion: 0.80% Augustine Fou
  4. 4. More realistic ratios from ongoing real-world test since 2007 1% CTR 1% conversion 10,000 impressions 100 clicks 1 purchase (CPM) (CPC) $20 avg ticket, 5% (CPA) -4- $1 rev share Augustine Fou
  5. 5. So What? “In my real-world experiments, run continuously since 2007, CTRs of around 1% are reasonable and conversion ratios of 1% are observed. This means it takes 10,000 impressions to drive 1 sale. Depending on the average ticket and average revenue share, it remains very hard to break even. Advertisers would do better to pay only on acquisition/sale – that is the ultimate performance-based advertising.” - Dr. Augustine Fou -5- Augustine Fou
  6. 6. Dr. Augustine Fou – Chief Digital Strategist “I advise clients on optimizing marketing tactics to achieve greatest ROI and business impact.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT '95) AT AGE 23 ClickZ Articles: http://www.clickz.com/author/1151/augustine-fou Slideshares: http://www.slideshare.net/augustinefou LinkedIn: http://www.linkedin.com/in/augustinefou @acfou Augustine Fou
  7. 7. APPENDIX December 4, 2012.
  8. 8. Airbnb Conversion Funnel Source: Compete Millward Brown December 4, 2012.
  9. 9. Booking.com Conversion Source: Compete Millward Brown December 4, 2012.
  10. 10. Hotels.com Conversion Source: Compete Millward Brown December 4, 2012.

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