analysis - financial, roi

Intent to Purchase

Intent to Purchase is a key metric for analyzing the success of online or offline media spending based on ROI. “It is becoming very important because we constantly have to be able to say if investing in [certain] types of media will drive towards a response,” says an agency researcher in AdAge.

One way to increase intent to purchase is to diversify your media mix---adding print or online to TV for example, according to a study by market researcher Advertiser Perceptions. Their research showed that consumers were more likely to express an intention to buy with multiple media across categories such as consumer electronics, apparel, automobiles, beer and toiletries. 

CAGR (Compound Annual Growth Rate)

CAGR (Compound Annual Growth Rate) is a measure of the rate of return on an investment; it describes the rate at which your account grew as though it had grown at a steady rate.

For more information on CAGR, including how to calculate it, see this great mini-tutorial at Fool.com.

Source: Fool.com

Purchases per Buyer

The average number of purchases by a single buyer within a specified timeframe.

Share of Revenue

Total revenue expressed as a percentage of all revenue.

EBITDA Explained

EBITDA is one of those terms that marketers really need to know.

You are most likely to hear it used when companies are analyzing or reporting financial performance, particularly cash flow. EBITDA stands for “earnings before interest, taxes, depreciation, and amortization.”

The formula is: 

EBITDA= Revenue – Expenses (excluding interest, tax, depreciation and amortization) 

The idea behind EBITDA is to provide a true picture of future potential profitability of a company, particularly a young or fast-growing one, before expenses from creditors are taken into account. It is used by some investors as a substitute for net margins. 

Although many companies use EBITDA some experts believe that the use of EBITDA leaves out many expenses so it is not an accurate measure of profitablity. They point to two main problems:

  1. It is not a proxy for cash flow, even though some companies use EBITDA and cash flow interchangeable, because it doesn't measure actual cash flowing into a company.
  2. Specifically, EBITDA does not take into consideration: 
    • Variations in accounting methods
    • Cash required for working capital  
    • Debt payments and other fixed expenses 
    • Capital expenditures  

According to Fool.com, Free Cash Flow (FCF) is a better way to evaluate cash flow. 

Whichever term your company utilizes be sure you understand it so that you can be knowledgeable about your company's financial health and performance as well as how marketing impacts it.

Source: Fool.com

Competing on Analytics: The New Science of Winning

cover of Competing on Analytics: The New Science of WinningCompeting on Analytics: The New Science of Winning
author: Thomas H. Davenport,Jeanne G. Harris
asin: 1422103323

You have more information at hand about your business environment than ever before. But are you using it to “out-think” your rivals? If not, you may be missing out on a potent competitive tool. In Competing on Analytics: The New Science of Winning , Thomas H. Davenport and Jeanne G. Harris argue that the frontier for using data to make decisions has shifted dramatically.

Lyris

Lyris HQ provides marketers a “one-stop shop” for accessing multiple toolsets, including emaillist services, list manager and email analytics.

ROAS

Return on advertising spending

Syndicate content