As a marketing manager, if you could compare the cost-effectiveness of the various channels of marketing you deploy, accurately and comparatively, how valuable would it be to your marketing decision making? In October 2012, Google Analytics announced the beta version of the Google Analytics Cost Analysis tool.
In its present form, the Google Analytics Cost Analysis tool lets you import cost data from any digital source like PPC, display advertising, affiliate marketing, social media, and SEO to measure each for a return on investment comparison.
Accessing the Cost Analysis Tool
The cost analysis tool is an addition to Google Analytics and is available to all users of Google Analytics. When you sign into Google and open any of your website’s profiles, you will find Cost Analysis as the last link under Traffic Sources in the left navigation.
How to Upload Data to Google Analytics
To use the Google Analytics Cost Analysis Tool, you first need to upload the cost data. There are two ways to do this. You can use a:
- Self-service API to upload the cost data
- Third party application like Next Analytics
The cost data upload feature allows you to import the campaign costs of non-Google paid campaigns in CSV format into the cost analysis tool. The Google Analytics Cost Analysis tool combines this cost data with the data it already has on user interaction and reports on the return on investment (ROI) of each campaign
- Make sure your marketing campaign generates UTM tags for each of your URLs. Google has a URL builder which makes UTM tags if needed.
- You will need to create an Excel template for the campaign data. This can also be done within Google Analytics. You can select all the metrics you want to appear, but at the very least you must choose “Cost.”
- Once you download the saved CSV template, you can fill it in with your data from the campaign’s metrics.
- Now you can upload that CSV file into your Google Analytics account.
- Click on Cost Analysis, and you can see your costs for each campaign you have uploaded.
Note: When entering your data into your Excel template, keep date formats, UTM parameters, and currency precisely the same, so it uploads correctly.
Handling Cost Data
A best practice would be to make sure each of your data sources are separated as custom data sources. If you run a PPC campaign on Yahoo! and have an affiliate marketing partner, you should ideally create a custom data source for your Yahoo! campaign and a separate one for your affiliate marketing campaign. This way you will be able to manage your data sources better. For instance, if you wanted to delete one of the data sources in the future, it would be easier to do so if each of your cost data sources were uploaded as a separate custom data source.
Marketing Cost Analysis Reporting
The clicks/cost report in the tool lets you compare the click-through rates, cost, and the conversion rate of all your paid online marketing channels. You can get a comparison of how much each campaign costs, what the revenue from each campaign is, calculate the ROI, and compare the margins you get from each marketing campaign. Effectively letting you compare each digital marketing channel’s cost-effectiveness in your marketing mix.
How to Run ROI Analysis
An ROI analysis is calculated by running a Cost Analysis report and an ROI report. Google Analytics calculates Return on Advertised Spending (ROAS) from your different marketing campaigns. ROAS is calculated by taking the difference between Conversion Value and Channel Spend. For example, if you spent $100 in Google Adwords, which resulted in $1000 in e-commerce sales, your ROAS would be 1000%. The campaigns with the higher ROAS will be the ones you should invest more in.
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