“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” John Wanamaker coined this saying over 100 years ago. Even with today’s technology, many business owners still find themselves in the same rut. Modern campaign tracking can provide us with outrageous amounts of data from how many times an ad is displayed to an audience to how many people click on your web site, but analysing that data can be as mysterious as reading tea leaves. Today we hope to clear away some of the smoke so you can tell if your campaign is working or not.
First some caveats:
- There are many forms of advertising: television ads, radio ads, print ads in newspapers and magazines, digital ads, direct mail, email, etc. All of them have their merit and there are people who will die on a hill for each of them claiming that they are the best way to reach your audience. But none of them are a magic bullet solution. Take the time to determine what solution works best for your product or service. Using the wrong platform is as effective as throwing your money in the ocean.
- We’re going to discuss digital ads because 1) that’s a major part of our business so we know it well and 2) most small businesses use digital ads as a cost effective way to reach a large number of customers.
- We’re going to assume that you’ve got killer design and copy and that your ad is perfect for your buyer persona.
With those items out of the way, let’s get down to brass tacks, how can we accurately measure the success of our campaign? There are a few steps to follow that are common rules of thumb, starting with…
What Are the Campaign Goals?
Before starting any marketing campaign it is imperative that you determine your goals for it. You cannot measure the success of a campaign if you do not know what you are measuring for. I’ll repeat – You cannot measure campaign success if you do not know what you’re measuring for! So what is your goal? Sales may seem like the most obvious answer, but what about brand awareness? Maybe the goal is to expand your reach on social media? Or maybe you’re trying to reach a very specific audience. Whatever your goals, they will determine what metrics you’ll need to pay attention to.
Having a strong plan doesn’t just help with marketing, either. It can direct the sales team toward products you want to feature and account managers will be prepared for questions they may receive from customers. As a guideline, it’s good to plan about a quarter out, minimum. That gives you and your teams enough time to gather or build assets, determine your strategies, and decide on your synergies. All of that was just buzz-speak for, “the better the plan the better the execution.” Marketing works best when it’s done holistically across departments. Working in a vacuum, as the phrase implies, sucks.
What Are the Metrics?
Metrics, for the uninitiated, are the measurements that digital ad and social media platforms track for everything that is posted online. That’s a lot of data! Here are some of the most common and useful:
- CTR – Click Thru Rate:
Click thru rate is the measurement of the number of times people click on the link in your ad. Usually this leads to an online store or a landing page. CTR is a good metric to pay attention to because it shows you how many times people have gone to the desired destination. CTR can be misleading because it does not equal a conversion or sale, only that they took the first step into the funnel.
This measures how often people interact with a social post whether that’s clicking a reaction, commenting, or sharing. Engagement is a good metric to pay attention to because it is a ground level representation of actual human interaction with your ad or post. Engagement can be misleading because it is very anecdotal and opinions expressed in that engagement may not represent the majority opinion of your target audience.
This is the number of people who see your ad, total. Reach is a good metric to pay attention to because it gives you a very reliable number of how far your ad has spread out into the world. Reach can be misleading because you don’t know if the people who are seeing the ad are your target audience.
This is the number of times your ad is served to an online audience. Impressions are a good metric to pay attention to because it is a quantified number of times the ad has been served to an audience. Impressions can be misleading because it doesn’t specify whether or not the audience has previously seen the ad, therefore it may be seen by the same people multiple times.
- CPC – Cost Per Click:
Cost Per Click is a price generated by comparing the amount spent on advertising versus how many people have followed the desired result and clicked on the call to action in your ad. CPC is a good metric to pay attention to when determining cost of acquisition. CPC can be misleading because without follow-up supporting data you don’t know if the acquisition cost is related to a sale or entry into the sales funnel.
Conversions means that the customer specifically took the action you wanted them too in the ad. It is important to remember that this may not be a sale, but might be entering an email address or answering a survey question. Conversions are a good metric to pay attention to because they are direct actions inspired by and traceable to the ad. Conversions can be misleading because they do not correlate directly to brand success, only the ad’s success.
With these metrics in mind, you can take the results you see in your analytics and compare them to the goals you set at the start of your campaign. Speaking of goals, let’s take a look at two specific examples and see how we can use the metrics mentioned above to determine a campaign’s success.
Nobody can purchase your goods or service if they don’t know it exists. Brand awareness is the goal of growing an audience that will engage with and purchase from you. When we are doing a brand awareness play some of the best metrics to pay attention to are:
All of these are related to how many people are exposed to the ad and how much they are interacting with it. By comparing these numbers we can see how well the campaign is doing. If your Impressions and Reach are high but Engagement is low then the ad may need some work. If Engagement is high but Reach and Impressions are low you might not be excited, but an engaged audience is definitely more likely to buy and tell their friends. Different combinations of data can tell you different things.
We saved this one for last, because it’s the overall sign of effective marketing. Having revenue growth for the business is definitely on the mind of most business owners. Paying attention to following is most useful:
The combination of these metrics can show how many sales can be attributed to the ad directly and determine the ad’s ROI. In addition you can determine if general brand awareness increased by comparing the sales figures from before the campaign and after it has completed its run.
As you can see, knowing how to read the numbers is essential to your ongoing marketing strategy. We understand that these can seem complicated, so if you’d like some help give us a call. We’ve made reading these numbers our business and we’re ready to help you decipher yours.