Impact of Website Speed on Conversions
With a total turnover of 3,000,000 euros and an average value per conversion of 900 euros, we have recalculated the impact of a 1.5-second faster website on conversions and the necessary adjustment in AdWords spending.
Assumptions:
- Total turnover: 3,000,000 euros.
- Average value per conversion: 900 euros.
- Improvement in loading speed: 1.5 seconds.
- Increase in conversions: 10.5%.
- Annual costs for accelerating the website: 3,000 euros.
Calculations:
To achieve the total turnover of 3,000,000 euros with an average value of 900 euros per conversion, the original number of conversions is 3,333. With a 10.5% increase in conversions due to the speed improvement, this results in 350 extra conversions, yielding an additional turnover of 315,000 euros. After deducting the costs for accelerating the website, the net extra turnover is 312,000 euros.
Conclusion:
To keep conversions identical with a 1.5-second faster website, the savings on AdWords would theoretically be equal to the net extra turnover generated by the speed improvement. In this case, AdWords spending could be reduced by 312,000 euros to keep conversions identical, thanks to the 1.5-second improvement in website speed. This illustrates how a significant improvement in website speed can not only enhance the user experience but also have a substantial financial impact on turnover and the efficiency of advertising spend.