Evaluate a channel against the purpose you set for it. If you expect sales, check orders and financial results. If you aim to attract visitors, start with traffic sources, engagement, and actions on the site.
For comparison, use existing aggregated reports obtained lawfully. Agree on the period and the rules for calculating metrics. Consider separately the result that the report attributes to the channel and the store’s net profit after all costs.
Define the purpose of each channel
Before evaluating, write down what result you expect from the channel: site visits, inquiries from potential buyers, or sales. In Google Ads, the campaign objective should match its main purpose: sales, lead generation, or website visits.
Ask the employee or contractor responsible for promotion to prepare a short table. Include the channel, purpose, evaluation period, and the metric you will use to make a decision. For a “sales” objective, include orders, costs, and gross results.
Check what visitors do on the site
The Traffic acquisition report in Google Analytics shows where new and returning users come from. Start there to compare traffic sources with what visitors do next.
The engagement rate is the share of engaged sessions. A session is a separate period of a user’s interaction with the site. The session key event rate is the share of sessions in which a user completed a key event. Before comparing, find out which action is marked as the key event in the available report.
| What to review | What the owner should do |
|---|---|
| Traffic sources | List the channels you are evaluating and the number of sessions for the selected period. |
| Share of engaged sessions | Compare channel metrics for the same dates. |
| Share of sessions with a key event | Check the event name and compare the same action. |
| Orders | Separately verify their number and statuses against the store’s records. |
| Costs and gross results | Prepare amounts for the agreed period and check what each calculation includes. |
Do not treat every key event as a purchase. State the action directly in your table so you know which result you are comparing.
Agree on the period and comparison rules
Before calculating, check the start and end dates, time zone, and order statuses in the reports. Record how you account for discounts, cancelled sales, and returns. Prepare the cost of goods for the gross profit calculation.
Account for conversion delay—the interval between a click on an ad and completion of a specific conversion action. Review the available data on this delay and choose an evaluation period that takes it into account. Do not set the same waiting period for all campaigns without evidence in the data.
Also record the attribution model used by the report. Attribution assigns credit among touchpoints according to a rule, a set of rules, or an algorithm. Use the sales amount attributed to the channel with this model in mind. Do not conclude from it that all sales occurred solely because of advertising.
Calculate gross results separately from ROI
Net sales equal gross sales minus discounts and sales reversals. Gross profit from goods for a period is calculated as net sales minus cost of goods.
Place the channel costs next to gross profit. If you subtract them, label the resulting amount according to the calculation. Do not call it net profit if the store’s other costs have not been included.
ROI is the ratio of net profit to costs. Evaluating it requires a calculation of net profit. Gross results alone are not enough.
Illustrative example of evaluating a channel
Suppose a channel generated 1,000 sessions during the selected period. A key event, “purchase,” occurred in 40 sessions. The share of such sessions is 40 ÷ 1,000 × 100% = 4%.
For the group of orders that the available report attributed to this channel, illustrative gross sales are UAH 34,000, discounts are UAH 2,000, and reversals are UAH 2,000. Net sales equal UAH 30,000. With a cost of goods of UAH 18,000, gross profit is UAH 12,000.
If channel costs are UAH 5,000, UAH 7,000 remains after subtracting them. This is the result of this calculation alone, excluding the store’s other costs. All figures are illustrative. They show how to compare results and do not prove that advertising paid off.
How to use the “Період” report in Torgsoft
To compare metrics, prepare information for the agreed dates. In Torgsoft’s “Період” (Period) report, you can calculate information for any period.
Select the same interval you use to evaluate the channel. Use the resulting calculation when checking periods in your working table. Enter advertising costs and traffic metrics from the relevant reports.
Calculating for the same dates helps organize the comparison. To make a decision about a channel, separately check the key event, attribution model, and cost components. Matching periods alone is not grounds for attributing the entire result to advertising.
What to record before making a budget decision
- The channel’s purpose and the metric used to measure it.
- The evaluation period, taking conversion delay into account.
- The key event name and the rules for recording orders.
- Net sales, cost of goods, and channel costs.
- A specific next action: continue evaluating, check discrepancies in reports, or review costs.
Go back to the previous step