A new Web Marketing ROI Calculator - Part 1

By Robin Nobles
Posted Tuesday, October 19, 2004

In the beginning, search engine marketers were only concerned about top 10 rankings. Do you remember those days? Then, as things progressed and we began to work "smarter," we began to take note of how those top 10's were actually converting to traffic and sales.

After all, in any marketing campaign, the true bottom line should be your ROI, the return on your investment. That's how you'll know if your marketing efforts are really working, or if you need to go back to the drawing board and try something new.

Recently, I was introduced to a new ROI calculating service called KeywordTool. It covers both pay-per-click engines and regular engine results.

To write the article, I interviewed Chris Genge of KeywordTool (http://www.keywordtool.net), and he took me on a tour of the service itself.

Question:
Please explain what KeywordTool is and what it really does.

Chris:
"Deciding which keywords best suit each Web site and which ones specifically will generate sales/conversions is perhaps the toughest job in SEO. Tools like Word Tracker are a great help in narrowing down keyword selection, but then what?

"In the past, decisions were not based on facts but mostly speculation. This gave people no alternative but to promote or bid on larger keyword groups. We used a shotgun approach in hopes of increasing sales, with no way of telling which keywords were adding to our bottom line!

"A common saying in advertising is: `In any good campaign, 50% of all advertising dollars are wasted, but which 50%?' KeywordTool can answer this question for keyword promotion campaigns.

"KeywordTool's tracking service tracks the conversion or sales performance of keywords on search and pay- per-click engines, showing which keyword phrases are actually converting into customers and from which search engines. It is not a visitor tracker; instead, it determines keyword performance.

"With this keyword referral/conversion rate information, one can then fine tune their keyword choices and streamline promotion and bidding expenses to increase efficiency, sales, and profits, or in other words...the bottom line.

"KeywordTool is an online service that gathers information about your Web site referrals and sales/conversions. Using your private user name and password, you can then access the stats so you can review the information and make informed decisions about how to continue your online promotion.

"KeywordTool is designed for use with SEO and Pay-Per- Click (PPC) campaigns. It's well suited for both."

Question:
Is there a way that we can see a demo of how the service really works?

Chris:
"Go to (http://www.keywordtool.net) At the top of the page, you will see the log in. Use the username of "keywordtool" and password of "demo" to access the demo.

"The first page is the list of search engines that have sent referrals to the specific Web site you wish to have monitored. Only search engines that have sent a referral will appear on the listed sites. New search engines will appear as referrals are sent.

"The `Create details' or `Edit details' in the first column is where you would click to configure your search engine settings. This is where you tell KeywordTool what your average cost per click is for each search engine you want to calculate. This can be filled out after some data has been gathered.

"The search engine column is the list of only those search engines that have referred visitors to your Web site. You will notice that KeywordTool will also differentiate between regions for those search engines that are regionalized.

"The Column marked "Clicks" tells you the total number of referrals sent by each SE.

"PPC is the average price per click you have set for yourself. For those using this for SEO, this can be left blank. The PPC can be changed or added at any time, allowing you to re-calculate your PPC using new information.

"CONV is the number of conversions you have received from that particular search engine. The details about the number of conversions are at the next level.

"You can define what a conversion is:

-A "SALE"
-A subscription
-Downloading a file
-Filling out a form
-Or anything you consider to be an acquisition

"The CONV% is where KeywordTool calculates the percentage of conversions based on the number of referrals received from that search engine. It's really just a performance guide of the search engine for the keywords you have listings for.

"PPA is the `price per acquisition.' It tells you how much each new customer costs you for that particular search engine. The number indicated is rounded to the closest dollar.

"ROI is your potential return on investment. It's based on the information provided and the referrals and conversion rates recorded.

"Some of the rows don't have information, because we haven't defined the cost per click or estimated profit on that particular search engine. This can be added or updated at any time.

"Start the next section by clicking on the column marked `Clicks' to sort the SE's from highest referrals to lowest. Yahoo US has the highest number of referrals, so it comes to the top of the list.

"Click on `Yahoo.US.' It will then take you to the next screen where there are 2 sections marked `search words' and `categories.' Search words are referrals from SE', and categories are from directories. Yahoo displays both so KeywordTool separates the results.

"Click on `Search Words.' The next screen will display the exact results and performance for each keyword phrase. Click on CONV to sort to the highest conversion keywords in this section. This is the section where you can start seeing which keywords are working well for you and which ones are not.

"The keywords that work well are ones that you can focus on to ensure they are also listed on the other search engines. You can quickly see which of your initial chosen keywords are working well and which you might want to consider dropping or reviewing. You can then work to get improved listings on other search engines for a small select group of keywords that you are confident will give you the highest ROI. The numbers provided in KeywordTool's reports could be used to make better, informed decisions.

"If a keyword phrase is not working well, it might either be the wrong keyword for the product offered or the sales presentation is not working well on that page. Knowing that this keyword is not working well, you can then start to make changes to improve performance. For anyone who has tried tweaking your Google AdWords Select based on your copy and click performance, this works in much the same way. With KeywordTool, it's fairly easy to know which keyword phrases to work on and which ones are working well for you already.

"The information KeywordTool provides will tell you how much potential a keyword phrase has, allowing you to know how much to invest in SEO or PPC.

"All the information in KeywordTool sections can be exported to Excel easily so you can manipulate the data and quickly determine what your strategy should be for getting better returns from your work. If you notice the Expert to Excel link at the top right of the page, it's a very handy little tool."

(Continued in Part 2)

About the Author
Robin Nobles, Director of Training, Academy of Web Specialists, (http://www.academywebspecialists.com) has trained several thousand people in her online search engine marketing courses (http://www.onlinewebtraining.com).