Measuring marketing campaign performance is one of the most important aspects of the marketing professional’s job. However, metrics used to measure how successful we are don’t always tell the entire story. Sometimes we rely on metrics that make our marketing campaign performance look really good, but the truth is they are nothing but vanity metrics. Promoting numbers that give the illusion of effectiveness leads to a superficial analysis.
Instead of focusing on numbers easily skewed by fraud, we should turn our attention to marketing performance metrics that give us a true picture of our campaign’s successes ... or struggles.
Finding the Right Angle
Fraud is rampant; Adobe estimates that upwards of 28 percent of online traffic is generated by fraudulent activity. Now apply that math to how you are measuring your marketing campaign performance. Are you looking at metrics like viewability and website traffic numbers? If so, you are likely counting quite a bit of fake activity in your totals. Do you trust bounce rates? Efforts spent there are a waste of time and money if you aren’t pulling in the right audience to begin with.
Even metrics that people see as marketing campaign performance cornerstones can be subject to watered-down statistics. Think about how easily a bot can fill out hundreds or thousands of lead generation forms, or how easily a human fraud farm can conduct illicit e-commerce transactions with stolen or falsified payment information. Your marketing team should consider all of these angles when analyzing campaign performance to better understand if and how to modify your strategy.
But not all metrics tell the wrong story. Metrics that measure true marketing performance can help you really look into what works and what doesn’t.
Related Page: How Affiliate Marketing Companies Can Fight Ad Fraud
Focus on Metrics That Help Your Marketing Campaign Performance
Avoiding meaningless marketing metrics isn’t as easy as it looks. It is often hard to move away from them because vanity metrics are easy to massage to tell the story we want. We can say we’re getting our message in front of more people with through-the-roof viewability statistics. We can boast about generating hundreds of new leads and talk about the great numbers we’re seeing. However, if we don’t measure performance on our ability to drive actual business, then the entire company fails.
Metrics that matter show how much growth your marketing efforts are bringing to the business. Relying on these to measure performance means that when the numbers are in the right spot, the business as a whole will see results.
8 Metrics for Measuring Digital Campaign Performance
How do you measure campaign performance? Below are eight digital media metrics for ad campaigns that you can start measuring right away to get a true picture of your marketing campaign performance.
1. What Is Average CTR?
Click-through rate (CTR) is an advertisement performance metric that lets you know what percentage of people who saw an ad (called “impressions”) actually clicked on it. The average CTR for an ad campaign can provide you with an idea of how effective that campaign’s design, ad copy, and the offer is at grabbing your audience’s attention.
Since an ad campaign can’t generate sales if people aren’t clicking on the advertisement, CTR is an important metric for every business to measure. Higher click-through rates mean having more opportunities to close a deal.
However, average CTR is a metric that can be prone to abuse, especially when dealing with affiliate marketing campaigns.
2. Conversion rates
These are important for evaluating growth markers like the number of leads generated or downloads of a white paper. However, not all conversions are created equal. Sometimes criminals make purchases with stolen payment information to commit outright theft or even affiliate fraud. This usually results in a chargeback to the business, so not only do you lose the sale but you are also hit with chargeback fees. Make sure to measure true, validated conversions to understand your audience’s actions.
3. CPM (Cost per mille)
Cost per mille (CPM), or “cost per thousand,” is an estimate of how much it costs to get one thousand ad impressions from a particular web page or affiliate marketing campaign. Wondering how to calculate CPM? It can be difficult because different websites, advertising platforms, and affiliate partners might have different rates for CPM and different ways of defining an impression.
Investopedia notes that one of the key weaknesses of CPM is the risk of “incorrectly counting impressions due to duplicate views, ads that fail to load, and advertising fraud.” For example, if an advertising platform or affiliate partner doesn’t track cookies well, and shows your ad to the same person twice, that one impression will be counted twice, which increases your CPM.
Such issues can complicate the CPM formula. It may be necessary to use tracking cookies to check how many people actually load the page the advertisement is on to eliminate duplicate views (to establish real impressions, or R). The amount charged by the advertiser or affiliate partner could be represented in the formula as cost, or C.
A basic CPM formula would be: CPM = C÷(R÷1,000). So, if you had 50,000 real impressions, and spent $500 for the campaign, then your CPM would be $10.
4. CPC (Cost Per Click)
Cost per click (CPC) is a basic metric that many business owners (and especially their marketers) should be familiar with. It’s a measurement of how much money is spent for each click generated by a given ad.
CPC is an important metric for estimating how cost-effective any given online ad campaign is. When running an ad campaign analysis, looking a cost per click can help you learn which ads are the best at attracting customer attention efficiently--which you can use to optimize future ad campaigns.
5. CPA (Cost Per Acquisition/Action)
Cost per acquisition (CPA)—sometimes referred to as cost per action, in which the “action” is typically a sale—is an estimate of how much money is spent to acquire a new customer from an ad campaign.
As noted by BigCommerce, “CPA is a vital measurement of marketing success” because it can be “used to directly measure the revenue impact of marketing campaigns.” When combined with sales metrics such as customer lifetime value (CLV) or average order value (AOV) and cost metrics like cost of goods (COG), it can demonstrate whether an ad campaign is having a positive ROI.
For example, if a business’ CPA for a given ad campaign is $50, their average order value is 75$, and their COG is $25 for those orders, then that ad campaign is just breaking even in the short term. However, if the CLV of the average customer is just $1,000, then the campaign’s long-term impact is a net positive worth hundreds of dollars per customer.
6. Return on marketing investment
Everyone in marketing should be measuring this metric. As a business, how much money do you make for each marketing initiative? For example, when you run an ad campaign you should know how much you are spending and how much new, qualified business you are bringing in as a result.
Just about every business has some type of revenue goal for each quarter. Tie metrics into this revenue goal so that you can find opportunities for collaboration with other departments in your company.
8. Total customer acquisition
Bringing new customers into your business should be the fundamental goal of any marketing team. Measuring how successful you are at this task is one way to make your team stand out as a success.
3 Ways to Optimize Campaign Performance
Considering the above metrics, how do you optimize campaign performance? Some methods of improving campaign performance include:
1. Comparing multiple metrics to find where leads are dropping off
Comparing the number of impressions a campaign or affiliate partner provides versus the number of clicks and customer acquisitions generated is a basic tool for identifying opportunities for improving a given ad campaign.
For example, if the total number of clicks for an ad campaign is low compared to the number of impressions generated, then the copy or design of the ad may need to be tweaked to make it more attention-grabbing to the target audience. If clicks are high, but customer conversions are low, then there may be an issue with the offer or the checkout process that the campaign is guiding leads towards.
2. Using performance metrics to establish advertising ROI
How much money should a business spend on any given ad campaign? Knowing how much revenue a campaign generates versus the capital spent is a necessity for any business.
If the cost of an ad campaign exceeds the total order/transaction value generated by the campaign, it can result in short-term losses. However, the total lifetime value of those customers can provide a long-term positive return on investment.
By tracking ad campaign costs and results, you can establish what your ad campaign ROI is and verify how much budget should be allocated to future ad campaigns. Making this more granular by tracking results on specific platforms can help you further optimize ad budget allocation for even better ROI in the future.
3. Identifying and eliminating ad campaign fraud
Fraud surrounding click rates, viewability, and other vanity metrics are often talked about and easy to spot. However, even some of the higher-quality metrics that measure what really matters are subject to illicit traffic.
For example, imagine a new pay-per click ad campaign. Let’s say you have moved past the vanity metrics and want to compare the return on investment (ROI) between two different ads, Ad A and Ad B. An easy A/B comparison test should tell you how much each click costs and how much actual money is spent by customers driven from each ad.
But, what would happen if Ad A was targeted by a botnet or a human fraud farm? You would register (and pay for) thousands of illicit clicks as a result. These fraudulent actions obviously result in no revenue or actual conversions.
Now the return you get from Ad A may not look as good as the return from Ad B. So, you decide to launch Ad B. However, if you take a closer look and remove the fraudulent clicks from your data set, you might find that Ad A is actually more successful. Not only could you lose money due to click fraud, but you could lose money because you looked at skewed data and made the wrong choice.
Protect Your Metrics with an Ad Fraud Solution
Once you are measuring the right metrics, make sure to protect your business with a solid ad fraud solution. Relying on software that pulls from hundreds of data points to block illicit activity while avoiding false negatives not only protects your business from criminal activity, but it helps preserve the integrity of your marketing campaign performance metrics.
Not all ad fraud solutions are up to the task. They need to do more than just block fraudulent traffic. You need a solution that detects traffic generated by bot, malware and human fraud alike. In order to ensure that you are truly protecting your business and not just creating a false sense of security, you need to turn to a trusted partner.
Anura has provided marketing professionals with peace of mind when it comes to preventing fraud. The team at Anura knows how to help keep malicious activity away from your campaigns while still making sure legitimate transactions are allowed to happen. Set up a demo today to see how Anura can make sure your metrics are measuring true performance and not allowing fraud to pollute your data.