How to Leverage the Google Analytics E-Commerce Feature
How can the ecommerce feature added to Google Analytics help your business? That depends on a number of factors at current, including your average spends per month, margins on particular products or services that you’re selling and the popularity of related key words or phrases. For example, you may have bid .50 per click on a key phrase such as “sony 42″ lcd” which might have a 2% conversion rate, and an average ecommerce value of $5 per visit. However, because of the infrequency with which this phrase is searched, the top line revenue value of this visitor would be significantly off target from that actual long term value, which would be easier to measure with a key phrase such as “sony lcd”.
There are, however, certain subsets of your advertising spend which can be greatly improved with the use of e-commerce features. For example, your search engine marketing spend through Google AdWords can be controlled and profitable if you use this ecommerce data to your advantage. Here’s how: Take your most popular, revenue generating, 100 key words or phrases in your typical Google AdWords spend. Analyze the per visit value of the key word or phrase that has a statistically significant number of purchases and visits. Now, determine your average margin on the particular SKUs that the individuals using those words or phrases are searching, and multiply by the advertising percentage necessary to make your campaign profitable. The success of this strategy will vary based on the breadth of targeted keywords which will allow you to reach your demographic. If you’re selling self made software and every sale is 90% profit then your results will differ signicantly from someone who is selling televisions with a 10% margin. In the next post I’ll describe real world examples of putting this strategy into action…
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