Tracking the Performance of Online Ad Campaigns   26 comments

When you’re tracking the performance of online ad campaigns, what data should you be looking at? Let’s examine the most important metrics for both PPC and display advertisers.

Impressions: How many times was your ad displayed? That’s the impressions metric, which is key for CPM display advertising; the more impressions, the more people who were exposed to your ad.

Impressions are also important for PPC advertising. You need your ad to be displayed before it can be clicked; the more impressions you get for your ads, the more clicks you’ll theoretically generate.

Obviously, when it comes to impressions, more is better. If your ad or campaign is generating a low number of impressions, you won’t get your message across—or generate a lot of clicks.

There are a number of ways to increase the number of impressions an ad receives. This may be as simple as increasing your ad budget or raising your bids on selected keywords; higher bidders get more and better ad placements. You can also increase your impressions by selecting higher-traffic or more appropriate websites for your ads. Improving the performance of the keywords you select will increase your impressions. That might mean changing from inexact to exact
matching or even selecting a different set of keywords for a particular ad.

Clicks: How many times was your ad clicked? That’s the clicks metric, key to PPC advertising; the more clicks, the more traffic you have to your landing page. Of course, you can’t get a lot of clicks if you don’t start with a lot of impressions, so that’s always job one. But a large number of impressions doesn’t always result in a large number of clicks; if your ad isn’t interesting or compelling, people won’t be inspired to click it.

For text ads, you should include more powerful words in your copy, make sure you talk about your unique selling proposition, and include a compelling call to action. For display ads, consider changing your image, including animation,
and adding other rich media content.

Click-through rate: A better measurement of ad effectiveness, is the click-through rate (CTR). This metric measures the number of clicks as a percentage of the number of impressions. A high CTR indicates that your ad is doing its job; a low CTR indicates that you need to retool your ad copy. CTR is totally independent of the number of impressions your ad receives. This enables advertisers on a budget to compare the effectiveness of their ads against big-budget competitors.

Percent of clicks served: When looking at the performance of individual ads within an online ad campaign, take a gander at the percent of clicks served metric. This data point tells you which ads in an ad group are getting the most displays. It divides the number of impressions for a given ad by the total number of impressions for all the ads in the ad group.

An ad with a higher percent of clicks served number is outperforming the other ads in the campaign; an ad with a lower number is underperforming the other ads.

Average position: In what position was your ad displayed on a search engine’s results pages? That’s the average position for an ad, and higher is always better. The higher an ad’s position, the more clicks the ad will get and the more traffic that ad will drive to your landing page. Advertisers are always striving for higher positions—to a point. You don’t
want to outspend your campaign by bidding to achieve one of the top two positions.

Cost: How much have you paid in total for a given keyword, ad, or campaign? That’s the cost metric—as in, this item cost you this much money over a specific time frame. Note that your cost for an ad campaign will never exceed your specified budget. In fact, it most often will come in under your budget, as you won’t always be the high bidder on all the keywords you choose.

Conversions: Next, we come to the topic of conversions. A conversion occurs when someone clicks your ad and then proceeds to purchase what you’re selling, or otherwise do what you want them to do.

Conversions—The total number of actions taken by people who clicked your ad. Conversions can never exceed clicks.
■ Cost per conversion—How much each conversion cost you.
■ Conversion rate—The number of conversions divided by the number of clicks.
■ View-through conversions—Tracks the number of conversions that happen within 30 days of a customer clicking your ad.  The assumption here is that just viewing your ad can lead to a sale some time later; the sale doesn’t have to happen immediately after the ad is served.

Customer engagement: Customer engagement revolves around the concept that the more you can engage the customer with your product or brand, through your advertising or other online activities, the more you enhance your brand identity and ultimately the more products you sell. Customer engagement is particularly important when you’re doing rich media advertising—especially ads with an interactive component. That is, you want consumers to listen to your audio pitch, watch your video, click your buttons or other interactive components, and so on.

Revenue: All of this brings us to our final advertising-related metric: revenue. If you’rein the business of selling products or services online, what really matters is how many sales result from your advertising campaign. Impressions and clicks and even customer engagement are fine, but dollars pay the bills.

Now, your ad network probably doesn’t directly track the sales resulting from your ads. That’s okay. You can do that yourself because you know what you sell and who you sell it to. Your job is to tie each sale to the ad that generated it. You want to know which ads generated the most sale revenue. That’s how you tell which ads are truly successful.

even if all you do is image-oriented display advertising, you still want to track revenue over the course of a campaign. Ultimately, you’re advertising to build your brand and increase your sales.

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26 responses to “Tracking the Performance of Online Ad Campaigns

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