Before you invest a single dollar into any traffic, it’s critical that you have some simple tracking set up so you can monitor some essential numbers in your marketing.

Tracking can be done using a number of different tools. What these tools give you is specific data about your traffic and shows which traffic sources are working.

Tracking shows you how many clicks, leads, and conversions a specific source of traffic is bringing you. It shows how much you’ve spent and how many leads you’re generating.

Tracking your traffic sources is essential because it tells you with hard data exactly what’s going on. It identifies where the profitable traffic is and which traffic is losing money.

Marketing Without Tracking is Like Driving a Car Blindfolded …

You have no way of knowing which traffic will be profitable and where your money is being wasted. You have no reliable way of making informed decisions about your marketing such as when to stop poor performing traffic and where to invest more.

But with tracking, just a few quick and simple numbers can tell you which traffic sources are making money.

At the most basic level, you want to monitor these three metrics in your marketing system.

The first important metric to note is:

Return on Investment (ROI): This tells you how much money you earn back for every penny you invest in traffic. It’s the most important of all marketing numbers for you as you analyse your marketing.
Earnings per click (EPC): How much money you make for every click you get on an ad. This is sometimes called “average visitor value” because it tells us what an average visitor is worth to you.
Cost per click (CPC): How much it costs you for each time a visitor clicks on your ad and comes to your website. This is sometimes called “cost per visitor” because it tells you what it costs you to get a website visitor.

When you’re tracking properly, and you have these numbers, you have everything you need to make informed and intelligent decisions about your business which can save you from making rather embarrassing and expensive incorrect decisions.

For example: Let’s say you have a conversion funnel and it’s making you on average $10 per website visitor. That means each visitor to your web page is worth ten dollars in revenue.

Now, let’s say you set up a Facebook ad. And because you know your numbers, and you know the average visitor coming to your web page is worth $10, you know that you can easily afford to spend $5 per click. Because for every click on your Facebook ad, you get a $10 back in revenue, which means $5 in profit.

Let’s say you’re talking to a sales rep about a brand new, whizz-bang traffic source. You’re told it’s the “latest, greatest thing,” and you’re under pressure to make a decision. On paper, everything looks great …

But this time, when you analyse the numbers, you see it costs $12 per click.

Well, guess what? Because you know your numbers, and you know you’re average visitor value is worth $10, you know that this new whizz bang traffic source is costing you $12 for each click on your ad.

The numbers don’t lie… This opportunity will not be profitable for you!

In fact, it’s actually costs you $2 per click. So, of course, you know not to use this advertising channel. No matter how much the sales rep tries to convince you, you know the numbers don’t stack up. And this will only ever lose money, unless you can increase the average value of your visitor to more than $12.

Not every traffic source can be profitable. But, if you’re tracking properly, you will know which ones are making money and which ones aren’t, knowing where to stop and where to invest more money.

This is the simple secret to successful scaling of your traffic. You simply monitor your tracking data and re-invest more on the traffic sources that have a lower “cost per click” than what your “average value per visitor” is giving you.

Not only does this show you which traffic sources are profitable and which aren’t … you can also start advertising with a smaller budget.

That’s because when you’re tracking, it allows you to test the advertising channel with a smaller budget, let that smaller budget drive traffic to your marketing system and see how it performs. If it’s profitable, then you can reinvest your profits back into your advertising and your profits continue to grow.