Executives at a small e-commerce company are debating AdWords performance metrics. If the budget is unlimited as long as return on investment (ROI) is positive, which recommendation best positions the company for maximum profit?

Executives at a small e-commerce company are debating AdWords performance metrics. If the budget is unlimited as long as return on investment (ROI) is positive, which recommendation best positions the company for maximum profit?

Answer

•  Ad spend should always be 7% of revenue, which should be used as the target ROI.
•  The company's email campaigns are the most profitable, with a cost per acquisition of £15, so it should use that as a benchmark when setting target cost-per-acquisition (CPA) bids.
•  Determine whether the campaigns are profitable, then test different target cost-per-acquisition (CPA) bid increases to see which maximises total profit.
•  Decrease the target cost per acquisition (CPA) for the campaigns from £15 to £10 to drive an increase in profit per customer.