Printer Friendly Version
Email this thread to a friend
|
Featured Web Site Template |
|
Reflects user activity within the last 5 minutes
|
|
| Member |
Message |
flyingrose
Staff
Joined: Oct 30, 2003
# Posts: 3361
|
Posted: 2007-Jul-05 05:21
There is an inverse relationship between maximizing ROI and generating maximum sales.
Here is the most obvious example of how that works. You can generally increase overall revenue and the quantity of sales by increasing spending, especially on general keywords. Doing this will reduce ROI because advertising costs as a percentage of sales must go up to do this. There is a definite point where your income will be highest but not profitable.
You can increase ROI by reducing spending, especially on general keywords. That is very likely to also reduce the number of sales you generate and your overall revenue. The sales you do make will be more profitable due to the lower cost of advertising - there just won't be as many of them.
So the challenge is to find a balance between maximum revenue and maximum ROI per sale. If you have a high markup and can afford it you can skew your advertising more towards higher revenue and lower ROI per sale. If you have a tight budget or low profit markup you will want to slide your spending more towards maximum ROI.
The first can increase the speed of growth while the second can generate gradual increases in growth with lower risk.
|
 |
You are not permitted to post messages in this forum or topic, because of one or more of the following reasons:
- You have not yet logged in, or registered properly as a member
- You are a member, but no longer have posting rights.
- This is a private forum, for which you do not have permissions.
If you are a recent member, it's possible that you simply have not yet confirmed your account. Please
check your email for a message entitled 'JimWorld Forums: Confirm Your Account' and follow the instructions
contained within.
If you cannot find this message, click here to Re-Send it.
|
If you are still experiencing problem, please read the
Login Assistance
Article for some advice on what may be causing your login not to work properly.
|
Switch to Advanced Editor and ...
Create a New Topic
or Reply to this Thread
|
|
Inbox
