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	<title>Boston Media Domain &#187; Commentary &amp; Analysis</title>
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		<title>Basic Online Marketing Math</title>
		<link>http://www.bostonmediadomain.com/basic-online-marketing-math/</link>
		<comments>http://www.bostonmediadomain.com/basic-online-marketing-math/#comments</comments>
		<pubDate>Sat, 12 Feb 2011 22:12:52 +0000</pubDate>
		<dc:creator>jeff selig</dc:creator>
				<category><![CDATA[Commentary & Analysis]]></category>

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		<description><![CDATA[Conversion Rate Formula CR = Conversions / Clicks * 100 This is the most simple and significant formula for advertisers, the conversion rate it means just how many people that click in your ad finally made a purchase. This is an example: Let’s see 1000 people click in your online Ad, and out of those 1,000 just 25 finally made a purchased or any other action that you considered conversion (download a brochure, sign up for a newsletter or more), on this case your conversion rate is 0.01% CR = (25/1000) * 100 =  2.5% Website Success Formula B = V x C x L Where: B = amount of business done by the site V = unique visitors coming to the site C = conversion rate (the percentage of visitors who become customers); note that the concept of conversion applies not only to ecommerce sites, but to any site where there is something you want users to do) L = loyalty rate (the degree to which customers return to conduct repeat business)  Landing Page Conversion Formula C= 4m + 3v + 2(i-f) – 2a Where: C = Conversion M = Motivation (what is the motivation of the user when [...]]]></description>
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<p><strong>Conversion Rate Formula </strong></p>
<p><strong>CR = Conversions / Clicks * 100</strong><br />
This is the most simple and significant formula for advertisers, the conversion rate it means just how many people that click in your ad finally made a purchase. This is an example:</p>
<p>Let’s see 1000 people click in your online Ad, and out of those 1,000 just 25 finally made a purchased or any other action that you considered conversion (download a brochure, sign up for a newsletter or more), on this case your conversion rate is 0.01%</p>
<p>CR = (25/1000) * 100 =  2.5%</p>
<p><strong>Website Success Formula</strong></p>
<p><strong>B = V x C x L</strong></p>
<p>Where:</p>
<p><strong>B</strong> = amount of business done by the site<br />
<strong>V</strong> = unique visitors coming to the site<br />
<strong>C</strong> = conversion rate (the percentage of visitors who become customers); note that the concept of conversion applies not only to ecommerce sites, but to any site where there is something you want users to do)<br />
<strong>L</strong> = loyalty rate (the degree to which customers return to conduct repeat business)</p>
<div id="attachment_232"> <strong>Landing Page Conversion Formula</strong></div>
<p><strong>C= 4m + 3v + 2(i-f) – 2a</strong></p>
<p>Where:</p>
<p><strong>C</strong> = Conversion<br />
<strong>M</strong> = Motivation (what is the motivation of the user when he/she gets to your page? Do they have a level of interest?)<br />
<strong>V</strong> = Clarity of Value Proposition (what is the valuable offer to your clients)<br />
<strong>I </strong>= Incentive (sense of urgency, offer valuable exchange for an action)<br />
<strong>F</strong> = Friction (elements to process, difficult forms can cause friction)<br />
<strong>A</strong> = Anxiety (entering sensitive or personal information)</p>
<ul>
<li>Value Prop and Incentive are Value Contributors</li>
<li>Friction and Anxiety are Value Inhibitors</li>
<li>You need the Contributors to outweigh the Inhibitors </li>
</ul>
<p>The value of this formula is that it represents each factor that directly affects the conversion of a visitor on a landing page.</p>
<p><strong><a href="http://syndikomm.com/blog/wp-content/uploads/2010/01/landing-page-optimization.jpg"></a>Potential Lost Revenues from Landing Pages</strong></p>
<p><strong>(RPV * NVL) * BR = LRPV</strong></p>
<p>Where:</p>
<p><strong>RPV</strong> = Revenue per visitor<br />
<strong>LRPV</strong> = Lost Revenue Per Visitor<br />
<strong>NVL</strong> = Number of visitors who land on landing page<br />
<strong>BR</strong> = Bounce rate</p>
<p>(<strong>RPV * NVL</strong>) is also known as <strong>RETS</strong> = Revenue Estimate For The Traffic Source</p>
<p><strong>Viral Marketing Formula</strong></p>
<p><strong><a href="http://syndikomm.com/blog/wp-content/uploads/2010/01/viral-marketing-formula.png"><img title="Viral Marketing Formula" src="http://syndikomm.com/blog/wp-content/uploads/2010/01/viral-marketing-formula.png" alt="" width="257" height="64" /></a><br />
</strong></p>
<p>Where:</p>
<p><strong>Custs</strong> = Initial set of costumers<br />
<strong>K</strong> = Invitations send by each new customer * Conversions %<br />
<strong>ct</strong> = Viral cycle time<br />
<strong>t</strong> = time</p>
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