October 18, 2007, 12:00 AM

Retailers should analyze pay-per-click ad results before holiday season

Web retailers should analyze how well their pay-per-click advertising is working and make changes to improve results before the start of the holiday season, says Stephen Schramke, president and managing partner of web analytics firm Logic361 Inc.

Web retailers should analyze how well their pay-per-click advertising is working and make changes to improve results before the start of the holiday season, says Stephen Schramke, president and managing partner of Logic361 Inc., a web analytics firm specializing in pay-per-click performance.

“Online retailers who rigorously assess their performance now will maximize their return on advertising expense and financial performance this holiday season,” Schramke says.

Logic361 advises online retailers to know the dollar amount or percentage of advertising spending that actually generates results. Productive ad advertising spending for most of Logic361’s clients ranges from 45% to 65%.

The company recommends calculating the value of the appropriate conversion metric-cost-per-conversion, spend-to-value or return-on-investment-separately, without the cost of advertising that produces no value. This type of analysis produces a conversion goal that a retailer’s ad budget should be trying to achieve.

In addition, Logic361 advises retailers to know the amount of advertising expense rolling over each month that is not generating results, and rebalance spending accordingly. Retailers should identify keywords and ads that are money losers and assess their ability to become productive with a lower bid, a new ad or a better landing page, the company says.

It also suggests that retailers look at least six months back for keywords that are slowly accumulating $5 to $10 per month in expense. These keywords can go undetected because of monthly or quarterly reporting that isn’t identifying the accumulative cost, Logic361 says.

Logic361 has published more tips in its annual “10 Tips for Super Charging Pay-Per-Click Advertising This Holiday Season” on its web site.

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