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