Calculating the Potential Return from an Ezine or Newsletter

Before you go committing to an advertising slot you should first work out whether this exercise is going to be profitable
i.e.. Your Return On Investment ( ROI ).

To do this you need five figures,

The Cost of Placing the Ad.

The Number of Subscribers to the Ezine or Newsletter.

Profit per Sale of your Product ( this you should already know )

Visitor to Sale Conversion Rate. i.e. the number of visitors it takes, on average, for your site to make a sale. ( If you don't know this then you need to be monitoring your web site traffic with the TrafficFile Gold Service ).

The Click Through Rate from the Advert in the Ezine. At this stage you don't know it, so you are going to have to estimate. If you have chosen a Solo-Ad Ezine ( yours is going to be the only ad in the ezine ) then this could be anywhere between 1.5% - 5% depending on the audience match and your ad copy. If this is the first time you have run an advert then a good figure to start with would be a slightly pessimistic 2%. If not your first time then use the results from your last campaign ( you did record your results didn't you ? ).

Now,

Multiply the Click Through Rate by the Number of Subscribers
( This gives you the total number of Visitors you can expect )

Divide this figure by your Visitor to Sale Conversion rate.
( This gives you the number of Sales you can expect to make ).

Multiply this figure by the Profit per Sale.
(This gives you the Profit from the sales resulting from this advert )

Take away from this figure the Cost of Placing the Ad.
and this is the amount of money you can expect to make for placing the Ad i.e. your ROI .

If this final figure is positive then this is a rough estimate of your profit ( if negative it represents how much you will loose).

 

Finally, don't forget to take into account Your time, both in writing the Ad and in finding and placing ads with Ezines. There are no definite calculations for this and it is for you to judge whether the Profit generated is worth the time you invest in the exercise. The first time you place an Ad, the amount of time you invest will be fairly large due to the fact you have to Create the Ad from scratch, Fine appropriate Ezines and open dialogues with editors. However subsequent campaigns should demand much less of your time.