Web Tracking tools like Google Analytics have major limits in showing you the effectiveness of your marketing budget allocation:
1. They don’t consider gross margin but only the revenues generated by the conversion, because the costs of goods sold (COGS) are in your shop’s database. This overestimates ROI, and could lead to overspending on certain channels.
2. They don’t consider repeat purchases. Your customers will hopefully come back and make future purchases. This undererstimates ROI, and could lead you to suboptimal investment in certain channels.
Wunderdata combines your marketing spends with COGS, and considers both present and future revenues generated by conversions. Two metrics improve the limits of CPC and CPO:
1. Marketing ROI: shows how your acquisition costs compare to the sum of all net revenues they generate over a period of time, not only against the revenue from the first order.
2. Cost Income Ratio: even more accurate, CIR is based on customer lifetime value, and discounts costs of goods sold, and returns from related revenues. As a result, you can really see how much each channel is worth and decide where to invest your marketing budget.
Extend your analysis to single keywords and campaigns:
1. Judge which keywords or campaigns are delivering high quality traffic and which are not.
2. Investigate further with the global filters and learn why certain keywords or campaigns work better than others. Optimize your investment: increase spending for top campaigns and kill the worst performing ones.