Effective Revenue Share, or ERS for the insiders, is a measure of the profitability and effectiveness of a given ad campaign. ERS formula is Marketing Cost divided by Revenue (Cost/Revenue). The result is expressed as a percentage. ERS will indicate the total percentage of revenue that is absorbed by marketing cost.
This can be easily calculated for Adwords and Google Analytics. Thus, we created two new metrics. They have the same name for both, but they are little different:
- Adwords ERS is Cost / Conversion Value
- Google Analytics ERS is Cost / Total Value. Total value being Transaction revenues + Goals value.
* Thanks to DEP Ecommerce Consultants for this metric idea.