Measuring success in performance advertising is simple when you’re only using one platform. To gain a competitive edge, marketers commonly run campaigns using more than one marketing solution or provider. This, however, tends to complicate how you can effectively measure the campaign results as implementing different approach will bring about different outcomes.
Let’s use an example of a common performance-based approach. A modern marketer will use the following 3 methods simultaneously: AdWords, personalised retargeting and display campaigns. Within these models, they can utilise multiple channels as well (e.g. social, mobile). And finally, they may even use more than one provider for the same solution, for example, when using multiple retargeting approach.
In most cases, our judgment is often (unwisely) reduced to how many clicks every solution generates. This can be a wrong metric, leading to poor decision-making and results being far from reality. According to a CMO Council study, 84% of Asia Pacific marketers are using some form of technology to analyse and report on their campaigns, but only 4% believe they are doing a good job in measuring return on investment.
On that note, here are 3 bulletproof success indicators marketers can consider when tracking the effectiveness of advertising activities.
#1 Measure Conversion Cost Per Segment
Most marketers today are still using a channel-based approach – it primarily tracks and reports on output-based statistics like visits and inquiries. While these are useful measurements, they may not the most effective when it comes to judge performance-based results.
The first step when analysing marketing activities run by many providers is to find a way to measure the cost of each action in comparison, rather than just checking visits or clicks. However, metrics shown in different tools, especially retargeting panels, may not be directly comparable to each other. Marketers should hence use an analytical tool such as Google Analytics to accurately calculate the results for each source.
The trick here is to dig deeper into your statistics, and calculate conversion cost per each segment of users. Only by knowing that, you can easily estimate the average cost for a single conversion generated by the most important users. These are users who have never make purchase on the website, or returning visitors or buyers. By measuring your conversions per segment, you’ll get a clearer view on your ad spend ROI, as well as map out the best performing source of your conversions.
#2 Measure ROAS/ ROI
Every marketer wants to see a return on investment and should optimise advertising activities with that metric in mind.
The reason is simple, knowing the relation of profit generated by ads and cost of those ads, we can easily judge how ads contribute to our business growth. By checking ROAS (return on ad spend), you can decide how much volume is needed to be profitable, and where to focus your time and budget.
If you can determine to scenarios to pay more for a conversion for greater returns, you’ll optimise your existing budget to give a bigger bang for your buck. However, in the case of multiple channels approach, you’ll need to ensure that each conversion is reported only once so that you don’t need to pay a few times for 1 success. At the end of the day it will then be more clear what to do in order to improve your overall effectiveness. In other words, if you keep marketing activities cost-efficient and effective, it is better to split your marketing budget on last-click – which means that the direct channel will be paid.
Remember that growing your budget should only be done once you figure out how to calculate and optimise ROAS. Therefore, no matter what marketing activity your company is using, or how you grow your ad spend, your total ROIs will have better chances with every subsequent campaign.
#3 Measure Results Per Device
Marketers are always looking for ways to deal with increasing competitive pressures. By using many different sources, they have dozens of advertising options which can alter how and where the company’s message is displayed.
When we engage in an advertising technology provider, it is important to take note that we should check not only general results, but also take a closer look and compare the data per every device. By doing so, marketers can gain a valuable metric that tells us what are the best methods to attract potential buyers across different channels such as desktop, mobile and even TV, how these channels perform and what is its individual ROAS. Marketers can then plan separate advertising activities or cross-device campaigns based on this metric to better meet business goals.
For the best business results, marketers should look into engaging multiple channels and providers while making sure that they complement each other. This translates into higher complexity in measuring results and thus, marketers will need to know and understand their metrics of choice. By knowing which channel or advertising technology provider contributed to the final business results (ROAS and Devices), marketers can better plan and execute future marketing strategies at an optimal level.
By Chandra Kuncara, Country Director Southeast Asia at RTB House