Ad Campaign Analysis: Boston Matrix Adaptation

Posted on November 17, 2008
Filed Under Online Tools |

When running a lot of Google ad campaigns I use the following approach to decide which campaigns to run and which to drop.

The first stage is gathering ad statistics and sales conversion evidence while disregarding advertising costs. That gives me a measure of sales elasticity of ad exposure. In other words, more ads mean more sales mean high elasticity. If the ad campaigns are inelastic, they should be dropped in most cases.

Here comes the second stage. If ad campaigns are elastic, but non-profitable than you can try to improve profitability by fine tuning ad campaign or raising product price (if possible). Below is Boston matrix adapted for our case and covering four possible outcomes.

Fig. 1 Balancing Ad Campaigns (Elasticity-Profitability Matrix)
Ad Campaign Analysis: Boston Matrix Adaptation

Tracking sales conversion might be tricky. In the lack of hard sales conversion evidence the number of enquiries, emails or phone calls is a good secondary indicator of ad campaign elasticity.

Let us assume that our case is somewhere in Question Mark area. This is actually gambling – will ad-driven sales cover advertising costs or not? Do we need this?

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