How not to get lost while measuring advertising effectiveness

If you don’t know where you’re going, then it doesn’t matter which way you go. Digital marketing is more about analytics, than creatives. Measurement is the key to any process optimization, and advertising campaigns are not an exception. If you don’t understand what to measure, you don’t understand what to optimize and what to do next. Of course, you can assume “which channel is more effective” or “why conversions are increasing and sales are not” and just wait for grass to grow. But you can rethink and figure everything out, and succeed.

IT LOOKS LIKE IT IS TIME TO ANALYZE

The First Commandment: One advertising campaign differs from the other advertising campaign. So, you can’t just lump them together.
The new Toyota model launch advertising campaign and the performance campaign for kid’s clothing online store have completely different goals. Don’t compare apples to oranges. 

The Second Commandment: Off with vain metrics!
Vain metrics take pride but don’t affect income in any way. If you want to choose the best tools, you should know how to measure their performance correctly in every case and don’t forget about your main advertising campaign goals.

TELL ME THOSE THREE MAIN WORDS: KEY PERFORMANCE INDICATORS

We have divided digital marketing KPI into three main groups. Every group is connected with the user’s path to purchase: attraction, engagement and conversion.

Stage “Attraction”: tell about yourself

Imagine that you are launching a new product. You want to tell about it to as many potential clients as possible and show them the ad of this product. So, your goal is wide audience reach. Here we measure the number of unique users who saw your ad. Reach goes hand in hand with frequency – the average number of ad impressions to one user. 

Why do you need this metric? Imagine that you see the ad of a new passion fruit-flavored yogurt for the 10th time. You saw this ad a week ago, went to the shop and bought the new product. But the ad is constantly shown. How long can it?!

If you want people to like you, you should understand the sense of proportion. High frequency can not only decline the entire advertising campaign performance, but also cause brand hate. If you work with this metric correctly, you will find balance, and users will remember your ad, recall your brand and all this without annoyance and wasting the budget.

The next must-measure metric is post-view conversions. They refer to conversions where the target action was made by the user who saw the ad but didn’t click on it. 

Let’s look at the example. The user sees the ad of Nike sneakers from limited edition that are on sale, but he doesn’t do anything (maybe it’s the end of month and he is broke). Later he gets a bonus and decides to buy new sneakers. The user recalls the discount offers in the ad, goes to the website and makes a purchase. This time he didn’t interact with the ad, but the advertising channel has affected the purchase decision.

When you miss some significant factors on the user’s path to conversion, you won’t be able to measure the effectiveness of the advertising channels fully and, hence, to plan further advertising campaigns correctly. 

What you should also pay attention to at the stage of “attraction” is Brand Lift. With the help of this instrument you can “count” the effect of brand advertising and find out whether it works or not.

Stage “Engagement”: create interest

At this stage you should also measure reach, frequency and post-view conversions.

CTR is the ratio of clicks and impressions that shows the ad attractiveness. If nobody clicks on the ad, views videos and doesn’t open emails, then all the rest doesn’t make sense, and you remain at a standstill. Moreover, the lower CTR is, the higher cost-per-click is. So, measure CTR and make creatives that you would click on!

All the time clients say: “We need more traffic to the website!”

Traffic volume is the number of users that visited the website. It is measured in conjunction with others (we’ll talk about them later), because it reflects the quantity of attracted users, but not their quality.

Traffic sources. It is important to track the number of visits from every channel that is used: social networks, search engines, banners, remarketing, etc. Thus you can define which channels drive the most traffic and which don’t. 

Now let’s look at the main quality traffic metrics, because no one needs quantity without quality.

Bounce rate is the number of users who don’t want to interact with the website and leave. Here we track whether the user left immediately.

Average session duration. We think everything is clear here.

Page depth. It helps to track the number of pages the user views during one session.

Stage “Conversion”: create a desire to buy 

At this stage you also shouldn’t forget to measure traffic volume, traffic sources, post-view conversions.

Conversion rate is the percentage of users that made the target action on your website: left request, submitted application, made a purchase, etc. Conversion rate shows how many users who visited the website were converted into clients, which channels drove them and whether your advertising strategy works. 

Conversions show how many users completed target actions on your website: subscribed to the newsletter, hit the “like” button, left a comment, etc.

Last-click conversions are the number of conversions that were attributed to the last channel that was before completing the target action. 

If we talk about impulsive purchases when the user doesn’t need a lot of time to make a decision, then there is immediate conversion. For example, the user saw a pizza ad, wanted it, clicked on it and made an order. It doesn’t go the same way with automobile advertising. Things are more complicated here.

Assisted conversions are the number of conversions that were attributed to the assisted channel. So, this channel assisted in completing the target action, but it wasn’t the last one. 

Let’s look at the example. On a Saturday night the user wants California maki. He enters in the search line “sushi delivery london” and goes to the first two delivery websites (channel: search advertising). Then he returns back to the search, sees the article “Top Japanese Sushi Restaurants in London” (channel: organic traffic) and realizes that the  restaurant he has recently viewed is on the top list. Finally the user gets tired from searching and orders the pizza he has already tasted. The next day he sees the banner from the sushi restaurant that he saw yesterday (channel: media advertising). As the user has come across this restaurant three times, he clicks on it and makes an order.

So, what led to the conversion and performed the best?

  • search advertising
  • the article with delivery ratings (organic traffic)
  • the banner

No, not the banner. If there were no other advertising channels, there would be no order. The user’s path to purchase is a small life: everything plays its own role. That’s why for complex advertising channel measurement you should take into account assisted conversions. 

WOW, YOU HAVE A REALLY GOOD CONVERSION RATE! HOW MUCH DID YOU MAKE? REALLY?

The Third Commandment: Work on every stage of the sales funnel. Advertising is only the channel of communication. 

How does an advertiser usually see the user’s interaction with the ad? The potential client sees his ad, clicks on it, goes to the website and makes a call. The work is done. Not really, because the user didn’t make a purchase. A problem that can “scare away” the client may occur at any stage of the sales funnel.

Here is the story about a wise and a foolish advertiser. 

A foolish advertiser has a good ad, selling and qualitative landing page and lazy sales managers. While processing incoming leads, managers are too lazy to consult clients and send them back to the website for information. So, the client calls after visiting the website, and they send him back again. The client has gone. The foolish advertiser complains: “The ad doesn’t generate sales, nothing works”. A wise advertiser tracks every stage of the sales funnel. He thoroughly analyses everything and comes to the conclusion that the ad performed great, but his managers didn’t. He solves this problem and prosper.

We have reviewed only the top of the iceberg that is called “KPI”. You can put these tips into practice, and your advertising campaign won’t suffer the same fate as the Titanic. If you are interested in learning more, download the detailed KPI map prepared by the team of NT programmatic platform. You can print it, hang it on the wall and use it as a cheat sheet for planning and evaluating the effectiveness of advertising channels.