In the final article of our four-part series on digital advertising, we will look at how to evaluate and measure your digital advertising campaigns.
Let’s look at what numbers and metrics really matter and how these numbers tell a story of your advertising performance.
WHAT NUMBERS SHOULD YOU BE TRACKING WITH DIGITAL ADS?
One of the greatest advantages of digital advertising over print and traditional advertising is measuring.
Any online ad campaign will be able to give you plenty of insights on how people engaged with the ad. These numbers will tell a story of who saw the ad, if they clicked on the ad, and what they did afterwards.
Some may be raw numbers while others are performance metrics that need to be calculated. You can use all these numbers to better understand how your campaign performed, what impact your ads had on sales, and in planning for next year’s campaign.
Raw Campaign Numbers
Impressions—Nearly every digital ad platform will report on impressions, which is the number of times your ad has been seen. While this is a good number to know, it often does not tell the full story.
For instance, some digital ad platforms may count an impression even if the ad was not fully on the screen or if someone scrolled right past it on their mobile device without actually looking at it.
Ad impressions can include multiple views by the same person (either on the same device or on different devices), though sometimes people make the mistake of assuming it means number of people who saw the ad.
Finally, impressions do not always mean the ad was seen by potential customers. If you’ve done any print or billboard advertising, you know that circulation numbers or traffic data don’t equal qualified potential leads.
For digital ads, while you can be more selective in your targeting, there is likely still going to be a number of people who see the ad and are not interested. So impressions are a good number to consider, but you need more to measure the effectiveness of a campaign.
Clicks—Another number digital ad platforms will provide is the number of clicks. This is the total number of people who saw your ad and clicked on it to go to your website or landing page. Clicks are a good indicator of the effectiveness of your digital ad copy or design, as well as your targeting.
Conversions—The final raw number you should be measuring with your digital ad campaigns is conversions, the number of people who take the next meaningful action.
Sometimes this is a minor action, like following you on Facebook or signing up for an email newsletter. Other times this is a larger action, like requesting a quote for a shed.
If you have a retail location, you will want to measure offline conversions, like phone calls, driving direction requests, and foot traffic.
Conversion numbers should align with your campaign goals; email signups might be great for a brand awareness campaign, but don’t matter if your campaign is trying to boost sales or recruit employees.
Performance Metrics
Cost Per Impression—If you divide your advertising spend by the number of impressions, you will get cost per impression.
Cost per impression will vary based on the ad platform. Display ads usually have the cheapest cost per impression, but they are also the least likely to convert into sales.
This ratio is helpful for budgeting and for seeing trends within a single channel, but not as helpful in evaluating the performance of the campaign. Some advertising channels (like podcasts or digital ads on a single website) may charge you on CPM (cost per thousand impressions).
Cost Per Click—One of the most common performance metrics for digital ads, CPC tells you how much it cost per click on your ad. This is a top metric from Google search ads (that’s why it’s called Pay Per Click or PPC advertising), though the metric can also measure the performance of social and display ads as well.
CPC is helpful in discerning the performance of ad copy and creative. It can also help you compare different ad campaigns or targeting options.
For example, you may discover that you get a lower cost per click with ads running in a certain community or region, or that the CPC is higher for certain keywords.
Cost Per Lead—Another performance metric is Cost Per Lead or Cost Per Conversion. With this metric, you are dividing your ad spend by the number of leads or conversions created by the campaign. This is one of the most powerful metrics available for any advertising campaign, as it will let you see how your ads directly led to revenue and sales.
Cost Per Conversion is also helpful in comparing different advertising platforms. After looking at all the data, you may discover that one platform outperformed all others in terms of generating revenue at a reduced cost per lead. Now, when you plan for your next campaign, you can invest more in the platform where you get the most bang for your buck.
Revenue Generated—If the goal of an ad campaign is to sell sheds, you likely want to know how many sheds you sold. To do this, you will want to trace all your leads or conversions through the sales process and see if they made a purchase and how much that purchase was for.
If you have a CRM or ERP that’s tied into your website and tracking your ad accounts, a revenue report is fairly easy to generate. If you do not, you will likely need to pull this report by hand by comparing phone records or email submissions with your sales data. While time consuming, we find this to be a great source of data for year-end audits.
A CAUTIONARY TALE
A few years ago, I was working with a company who invested heavily in advertising to a certain territory. Throughout the year, the campaign was performing very well, they were getting significant impressions, clicks, and leads from this region. However, at the end of the year, the data told a different story. While they got a ton of quote requests from this region, not a single one turned into a signed contract.
Without a complete set of data, we would have assumed that the campaign was performing well. After all, impressions, clicks, and calls were all very positive. Yet, in the end this campaign was cancelled and the ad budget moved to another campaign because it failed to do its primary goal: sell sheds.
CREATE A SINGLE SOURCE OF TRUTH
As digital ad campaigns grow in complexity, so does the amount of data and data sources. Each platform will have their own metrics, along with data from your website analytics, call tracking, chat, ERP, or CRM systems. We’ve found it valuable to create a single source of truth: an online dashboard that highlights all the important metrics on one page.
Online dashboards can also help you present the data in different ways.
For example, you could create a dashboard that shows ad performance and sales breakdown by territory or location. You can also create unique dashboards for different stakeholders in your organization, so that ownership, leadership, marketing, and production all see the numbers that matter to them.
GOOD LUCK ON YOUR ADVERTISING JOURNEY
Over the last few articles, as we looked at all the different components to a digital advertising campaign, I hope you were able to glean some ideas on how to start or improve your company’s advertising.
A word of warning: Google, Facebook, and other advertising platforms are “really good” at taking your money; it’s why they have become some of the largest companies on the planet.
At times they may make recommendations or suggest you automate your advertising. I’ve found that their recommendations are often in their best interests but not necessarily yours.
Instead, I encourage you to start small, to find what works at driving leads and revenue, and then to scale your advertising from there. Good luck as embark on digital advertising and growing your business online.
RELATED ARTICLES
Introduction to Digital Advertising for Shed Builders (Part 1), March 31, 2021
Introduction to Digital Advertising for Shed Builders (Part 2), May 20, 2021
Introduction to Digital Advertising for Shed Builders (Part 3), July 23, 2021
