Getting ready to begin ad campaigns? Considering this channel for growth?
Those can make a lot of difference for your business. You’re on the right track.
Before publishing your good-looking ads for people to see, though, you need to have a quick intro to measuring campaign effectiveness.
This is important.
I’d hate seeing you pouring a lot of money on something that doesn’t bring sales. That’s why this guide is here.
Learn about the basic metrics for measuring the performance of ad campaigns on Google and Facebook. Also, you’ll get pro tips for maximum ROI – all of this, in simple language.
Sounds good?
Dive in to become a better advertiser by the time you’re done reading.
Here’s what this guide has for you:
⦁ Measuring Digital Advertising Effectiveness: The Basic Metrics
⦁ Google Advertising Metrics
⦁ Impressions
⦁ Clicks
⦁ Cost per Click (CPC)
⦁ Impressions by campaign
⦁ Conversions
⦁ Conversions by campaign
⦁ Click-Through Rate (CTR).
⦁ Facebook Advertising Metrics
⦁ Impressions
⦁ Cost per 1,000 Impressions (CPM)
⦁ Click-Through Rate (CTR)
⦁ Cost per Lead
⦁ Ad Frequency
4 Expert Tips for Measuring the Performance of Digital Advertising Campaigns
⦁ Focus on the cost to acquire a new customer
⦁ Set up a dashboard to track core KPIs
⦁ Hire a digital advertising consultant to help
⦁ Calculate the real ROI
Measuring Digital Advertising Effectiveness: The Basic Metrics
Most businesses run digital ad campaigns on two platforms: Google and Facebook.
Chances are good you’ve chosen them, too, and it was a great decision. Both are the most promising because they have the biggest audiences.
Here are the basic ad campaign metrics you need to track on these platforms. Let’s start with Google.
Google Advertising Metrics
Below, find the important PPC metrics in Google Ads accounts. Paying attention to them will make a lot of difference for your success:
⦁ Impressions
⦁ Clicks
⦁ Cost per Click (CPC)
⦁ Impressions by campaign
⦁ Conversions
⦁ Conversions by campaign
⦁ Click-Through Rate (CTR).
Here’s what you need to know as a future Google Adwords expert.
- Impressions
This metric shows how many times your ad appeared in Google’s search results.
Obviously, it’s an important one to track, as ads must be shown to let people click on them. That’s why impressions matter regardless of your goals. Without them, there’ll be no conversions.
Useful for: tracking exposure of ad campaigns.
Important: An impression doesn’t guarantee that someone has seen your ad. It just means that Google displayed it in search results.
- Clicks
Indicates how many times Google users clicked on links in your ads. More clicks mean more people coming to your website through the campaign.
The ads with the highest number of clicks are the most attractive to your customers. Focusing subsequent campaigns on the most popular content is a good idea to increase clicks.
Important: Fix website issues like 404 errors and keep a close watch over campaign landing pages. Even if a Google user clicks your ad and reaches a 404 error page, their “visit” will still be counted.
- Cost Per Click (CPC)
This metric shows how much an advertiser pays for each click in a CPC campaign. Google allows advertisers to set the maximum amount of CPC bid so they can manage their spending more effectively.
Useful for: avoiding going over advertisement budgets. The CPC defines the Return on Investment (ROI) from Google Ads, so keep a close watch to avoid overpaying for ad clicks.
- Impressions by Campaign
Not to be confused with Impressions. This metric indicates the number of ad displays for each active campaign on your account.
Useful for: Tracking Impressions by Campaign is necessary to determine the best-performing keywords and topics. Advertisers can use them to base future campaigns and attract maximum engagement.
- Conversions
Conversion in Google Ads happens when someone clicks your ad and completes the desired activity (visits a landing page, makes a purchase, signs up for an email).
Useful for: defining the best-performing campaigns, content, and tactics.
Important: Conversions is the metric you use to calculate returns on your campaigns.
If you’re wondering how your competitors perform, the average CTR in Google Ads is 4.40 percent.
Google Ads Industry Benchmarks. Source: Instapage
- Cost Per Conversion (CPC)
With CPC, advertisers determine the cost of acquiring each customer who makes a purchase or completes other desired actions.
To calculate CPC, divide the total cost of conversions by the total number of conversions.
Important: Keeping a close watch over CPC value helps to see issues with campaigns.
For example, some campaigns might have a very high CPC that’s draining your budget. Based on that, you might adjust those campaigns by reallocating the budget to others.
- Click-Through Rate (CTR)
CTR shows how many Google users who saw your ads actually clicked on them.
Tracking the CTR is a must to evaluate the quality of keywords and the relevance of the campaign to target customers.
CTR equals the total number of ad clicks divided by total impressions.
Important: A high CTR means your campaigns are using keywords and copy that target customers consider relevant. A low CTR, on the other hand, is a sign of irrelevant or poor content and keywords.
Why Track These Google Advertising Metrics?
Each metric from above helps to measure, compare, and assess your campaigns by supplying real data. Without them, it’s impossible to know if your business is benefitting from running Google ads and reaching advertising ROI goals.
Diver Deeper: The Benchmarks for Your Digital Advertising Strategy for eCommerce
Facebook Advertising Metrics
Facebook is the most popular social media network, so it’s your best bet for advertising. You can reach virtually any user on the platform, regardless of their location.
This applies especially to SaaS businesses. For example, a company selling marketing or HR software for small business gets almost unlimited reach with Facebook.
The most essential advertising metrics to manage your campaigns effectively in Facebook Ads Manager:
⦁ Impressions
⦁ Cost per 1,000 Impressions (CPM)
⦁ Click-Through Rate (CTR)
⦁ Cost per Lead
⦁ Ad Frequency.
Let’s now talk about what they mean.
- Impressions
This metric shows how many times your ads have been shown on Facebook. It gives you an idea of how “popular” your campaign was.
If one Facebook user sees your ad more than once, Ads Manager counts it as multiple impressions.
Important: don’t confuse Impressions with Reach.
Many advise tracking Reach (the number of Facebook users who saw your ads), but it’s a vanity metric that doesn’t make a lot of difference by the end of the day.
Even if a million people see an ad but zero actually converts, the ultimate return will also equal zero. So it’s better to focus on Impressions.
- Cost per 1,000 Impressions (CPM)
The cost of showing your ads 1,000 times. The easiest way to think about it: CPM is the cost of advertising on Facebook.
This metric measures the cost divided by impressions, multiplied by 1,000.
For example, if you have spent $200 and got 200,000, the cost to you was $10.
or 200/20.000*1.000= 10.
Important: CPM heavily depends on:
⦁ Facebook audiences that saw your ads
⦁ The time you ran the campaign.
So don’t be surprised in case you get huge differences in CPM between campaigns. This metric thus helps to determine the best audiences and time of the day to run ads.
- Click-Through Rate (CTR)
CTR means the percentage of Facebook users who clicked on ads and proceeded to your website.
A low CTR means people don’t consider your ads relevant and engaging. On the other hand, a high CTR suggests that your marketing message hit the chord with customers.
What is high CTR, you ask?
The data from Digital Branding Institute says the average CTR of Facebook ads is just 0.90 percent.
This average value doesn’t mean having 0.90 percent of CTR is an amazing success. As you can see from the image, there are industries where it reaches 1.61 percent.
Try to hit as high CTR as possible, obviously, but remember that achieving 0.90 percent doesn’t mean that you failed.
- Cost Per Lead
A critical metric that shows much each lead costs you. To calculate, take the Amount spent value and divide by the number of leads generated.
If a too high cost per lead is a red flag because it signals that you need to improve your campaign. Maybe you need to write an ad copy that converts better, adjust targeting options, or improve content.
- Ad Frequency
With this metric, you can measure the total number of times Facebook users viewed your ads. It averages between one and two per ad.
To calculate ad frequency, divide the data in Reach by Impressions.
Important: keep ad frequency value within four times. Displaying the same ad too many times to Facebook users might convince them to ignore it altogether.
4 Expert Tips for Measuring the Performance of Digital Advertising Campaigns
You’ve got familiar with the basic metrics, great job!
Now, let’s crank it up a notch and give you expert tips.
No worries if you don’t have a lot of experience with digital advertising. Knowing these will help you a lot when at the very start of your campaigns.
- Focus on the Cost to Acquire a New Customer
Let’s suppose you wrote a really great blog post to promote your product. Over a million people read it. Wow, that’s amazing, right? Yet, surprisingly, there are no conversions.
This begs the question: is reaching a million readers a good metric to track?
You’ve invested your time in writing the post, maybe even hired a proofreader from thesis sites and a graphic designer to make it super cool.
So the cost is there, but the returns aren’t.
The moral of the story is: focus on the cost to acquire new customers. It’s the best one to access your business’s growth (or how long you can invest in advertising).
If it’s too high, you might re-consider investing in more even if your campaigns reach a million users. And this, of course, applies to any advertising platform.
Advertise the Right Way: How to Effectively Market Real Estate via Facebook Ads
- Set up a Dashboard to Track Core KPIs
Each digital advertising campaign has at least a few goals. To monitor the performance for each goal, you need to track multiple metrics. For example, to track sales, metrics like CTR, Conversions by Campaign, are effective.
Set up a marketing dashboard to group all relevant metrics. Not only it’ll make performance monitoring simple but also help to detect issues like sudden decreases.
Setting up a custom dashboard for your business is something you’ll probably need some help with a small business marketing agency. The process is quick, but the dash will serve you for years to come if necessary.
- Hire a Digital Advertising Consultant to Help
Digital advertising isn’t something you can learn overnigt. You can launch a campaign, get sales, but having someone to spot trends, risks, and opportunities might be a good idea in the long-term.
There are many experts out there, plus you can get a free digital advertising consultation to understand who’s right for your business.
An expert might advise you which campaigns to run and how to scale everything to avoid spending thousands of dollars for little returns.
- Calculate the Real ROI
Tracking ROI is a must to measure your digital advertisement effectiveness. Still, it doesn’t give you a complete picture when it comes to assessing your investments.
Here’s what I mean.
The cost of an goes beyond the cost per click or per lead. Ad campaigns have landing pages, blog posts, and other resources. You paid for those, too.
Consider these costs when calculating the real ROI of each campaign.
Measuring Digital Advertising Effectiveness: Final Thoughts
Here you go.
Now you know how to become a better advertiser.
Digital advertising seems like it’s all about compelling ads and attractive post-click landing pages, but it’s not. Behind all of that, there is a lot of analytical work.
Having read this article, you made a huge step towards more revenues from paid campaigns by mastering analytics. Keep learning about digital advertising, and it’ll pay off nicely.
Here’s to your success!
