How to Analyze Your Ads’ Profitability

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These were mentioned in the class.

Why I calculate Revenue per Sale (sellthrough) and Revenue Per Borrow (readthrough) separately

I mentioned a video breaking this down in the live class; that was recorded pre-attribution links, so it’s somewhat outdated. The rationale behind calculating these separately is two-fold:

  1. Accuracy. If your RPS (sellthrough) and RPB (readthrough) are significantly different, say $12 and $8, the blended value in this example would underestimate the value of a sale and overestimate the value of a borrow. That leads to leaving unprofitable ads running and turning off profitable ads.
  2. Projecting out via revenue per click and profit per click. This is another analysis method for evaluating your ads’ profitability that I use for Amazon Ads, since it allows you how much each specific target (keyword, ASIN, etc.) is worth and thus set your bids accordingly. It can also be used for Facebook and BookBub.