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It’s Time for Advertisers to Level Up Their Performance Metrics

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It’s no secret that digital advertising has completely changed the game for marketers. While traditional forms of advertising didn’t provide the same insight into campaign impact, the current digital landscape allows marketing teams to report on the actual effects of their advertising in real time. However, this ability has lead many advertisers to get “drunk on data”, leading them to not truly allocate digital ad dollars to deliver the most bottom-line growth for their business.

Here’s what advertisers need to know in order to shift their measurement to deliver true value for their digital ad campaigns.

Revenue from ads doesn’t equal overall revenue

Too much data is preventing advertisers from seeing the forest through the trees. While it’s common practice to optimize towards KPIs like cost-per-click (CPC), cost-per-impressions (CPM) and even purchases, these metrics don’t communicate the overall business impact of ads.

A closer look at when ads make an impact

So when can you attribute real incremental growth to an ad?

Incrementality graph

In the graph above, you can see that both Michelle and Justine eventually made a purchase after browsing a product. While both of these customers failed to complete their purchase on their first visit to the website, Justine would have eventually returned to buy the item she browsed, regardless of whether or not she was targeted with an ad. Michelle, however, was served a Dynamic Ad, which was a major contributor in influencing her to complete her purchase. In Michelle’s case, you can say that this sale was directly attributed to an ad.

Ad attribution is the name of the game

While measuring traditional metrics can still be valuable for marketers, focusing on them exclusively can prevent you from also allocating digital ad dollars to deliver the most bottom line growth for your business. While you should still pay attention to these metrics in addition to overall revenue, it’s important to also take ad-effectiveness into account. Measuring ad-attributed revenue is vital for proving the effectiveness of your advertising.

Instead of assuming that there is a natural link between a particular ad and overall revenue growth, try taking a more strategic look at your campaigns. By determining which audiences members are actually influenced by your ads (and which are unnecessary to target and retarget), you can optimize your advertising to power meaningful growth in overall revenue.

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