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Advertising is important to your business. In this posting, I will not talk about how to promote on the Internet to your internet business. There are several options such as ezine ads, search engines, press releases, affiliates, offline campaigns, viral marketing campaigns, and so forth.

However, I want you to know more about this - tracking and testing, is crucial for your online business website.

Here is why …

Let’s say you run a test by using  two ads - X and Y. Contents of both ads are almost the same (not exactly 100% the same), and the total cost of your ad is also the same.

However, the second ad (Y) appeared to sell more than 200% of your ad X. It is doubling your direct benefit only by changing the ads element.

Instantly, you know that this is feasible. In essence, do not forget to perform the split testing and tracking for your ads.

One thing for sure, we can not know how many people view or read the ad campaign, but you can control where you advertise, and, to a certain degree, you are able to adjust the price.

Speaking of advertising, I want to talk in brief about what is called return on investment (ROI). Basically, you get final results from investment in something, such as an ad campaign. Here comes the importance of analyzing your ROI.

Return of Investment (ROI) is normally calculated as a percentage. So, whenever you spend $ 2,000 cost on an ad campaign, and you get $ 2,500 in back, then you have a 25% return on investment. That equals to 25% profit or return.

In simple term, we can say that for every dollar we invest in advertising campaign, we get $ 1.50 in return. If you make an investment for the ad campaign, you want to know what your ROI is for every advertising effort you have made, so you will find out whether it is still productive to keep on advertising, or it is even better to spend your money elsewhere.

For example, if you are using three sources of advertising (X, Y and Z), and your return of investment for each ad campaign is,

Source X: 20%
Source Y: 50%
Source Z: 100%

so, why not focus all of your advertising efforts to Source Z?

To be able to profit from your advertising investment, you should need to know the source of ads that generate sales. That is why you need to track of all your advertising efforts.

Please take note about ROI – it is not an indicator of success on selling. You might prefer to make a loss in the beginning or at least, break even on a product, so that you could make profits on the backend sales.

I would rather use ROI to split test different advertising styles, sources and methods and come with the ones that contribute you the highest return of investment.

There is another popular term called visitor value (VV). In essence, this means that how much each unique visitor is worth to you. For example, if your web site overall conversion rate is around 3%, and you maybe able to earn $100 sales for every one hundred visitors, then the average amount you could make per visitor is $1. This amount of money is called visitor value, but It does not mean that you will gain that much every time somebody comes to your web site, instead it is how much each visitor is worth to you.