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A Case Study in Results Measurement
October, 2002

By Bruce Newburger

As a marketing-oriented web developer, we have always emphasized website activity measurement as a critical component in planning your Internet marketing strategies. The following case study examines one project where extensive results measurement produced exciting opportunities for new website promotions.

In 1998 we launched a diabetic supplies e-commerce website at www.DiabeticPromotions.com. Sales and site traffic grew nicely each year. Our periodic website activity reports identified the best referrers of visitors from recruited links or search engines, including the actual search terms used by visitors.

This year we took marketing and measuring the site into high gear. We modified the e-commerce system to report the website referrer on each order. As a result, we could easily quantify the results of each promotion in dollars and cents…a breakthrough that gave us confidence to try more aggressive-and costly-promotions.

Search Engine Keyword Purchase. We have reported in recent tips our ability to control a site's search engine rankings by bidding for clicks. The top three search results are up for sale in most search engines, including Yahoo, Google, AOL, AltaVista and MSN. Here are a few of the search keywords we purchased, our cost-per-click bid, and the resulting ranking (at the end of August):

In a recent month, our keyword purchase program resulted in about 1,000 additional website visitors and 38 orders. Our sophisticated order/referrer tracking report allowed us to calculate:

Customer acquisition cost: $11.84
Cost to produce $1.00 in sales: $0.24

Is $1.00 in sales to a new customer worth $0.24 to the owner of this website? The answer depends on two other variables: 1) the profit margin on each sale, and 2) the likelihood of repeat sales from each new customer. We expect to continue and refine this successful promotion.

Broadcast E-Mail Marketing. We recently designed and delivered an HTML-formatted broadcast e-mail to the website's existing customer and prospect list of some 7,000 recipients, resulting in 57 new orders, as measured by our order/referrer tracking report. Since the recipients were already customers, there is no acquisition cost to calculate. Based on e-mail marketing costs, we calculate:

Cost to produce $1.00 in sales: $0.12

Since these sales were generated mostly from existing customers (although some might not have purchased for years), the success of this campaign will be measured almost entirely on profit margin vs. cost. We anticipate more frequent, periodic e-mail broadcast campaigns promoting this website.

For help in measuring your site's results or promoting it using search engine keyword purchase or broadcast e-mail, contact Dynamics Online.