You can’t seem to get away from ads for this one insurance company.
Not just on the TV. You hear them on the radio, scroll past their banner ads, see their cheesy billboards, and, once, you even saw a guy spinning a sign for them on the side of the street.
Their advertisements are everywhere, but does that mean they’re effective?
How to measure advertising effectiveness
With all of the advertising mediums to choose from, there’s no one way to measure effectiveness; there are thousands.
When are you supposed to find the time to siphon through all of those methods?
Trick question; you don’t.
Each of the following professionals have their own preferred methods for how they track the success of their campaigns, digital and traditional. What better way to learn than from the experts?
1. Create custom conversions
“Let's talk about the most significant platform: Facebook. The best way to measure ROI is by utilizing custom conversions.
Custom conversions allow you to create rules for events. When you create these rules, you can precisely measure customer actions. For example, you can filter all events to measure just purchases of ABC product over $100. You can also use them to optimize ad delivery and reach people who are most likely to take the desired action.”
“The main metric that we use to track our advertising, whether it's for search ads or for social media ads, is the total cost per new customer acquired.
We calculate it as the total cost of the advertisement divided by new customers brought in through the advertisement.
While it is a very basic measurement, we're able to make the calculation quickly, and there's no way to cheat the metric. We then compare the cost per new customer acquired to the total revenue per new customer acquired. If the cost per new customer acquired is less than the revenue they brought in then we know we will make a positive return on that ad.
We tend to run ads for as long as the return is positive.”
“As the CEO of a digital marketing agency, I mostly use social media to run advertisements. Social media platforms offer several tools to measure the performance of your advertisements such as estimated results for your objective and an estimate of people it will reach. But for me, I measure my advertisement performance by comparing the actual results with the values predicted by social media monitoring software.
For example, if my aim of advertising is to increase awareness of a service or product, I measure the number of people the advertisement reaches with the amount of reach estimated by social media tools. If the reach estimated and the actual reach has only a slight difference then my advertisements are performing well. If not, I make some changes and try to minimize the gap of the estimated results and the actual results as much as possible."
TIP: Looking for more information about social media monitoring software?
4. Teamwork makes the dream work
“UTM tags are key to measuring your digital marketing campaigns. UTM tags allow you to track the effectiveness of your paid and organic social campaigns in Google Analytics. In addition, setting up Facebook Attribution modeling allows you to measure the effectiveness of your campaigns across multiple devices, publishers and channels.
Using Google Analytics attribution modeling also allows you to assign a value to the channels and touchpoints that had an influence in helping to assist in a sales conversion.
Therefore, the combination of UTM tags, Facebook and Google Analytics attribution modeling provides today's digital marketers with accurate tools to help track every penny spent in a digital marketing campaign across channels and devices.”
- Alistair Dodds, Marketing Director and Co-Founder of EIC Marketing
5. Know which metrics connect to your objectives
“The good thing about social media ads is that they provide you with key analytics that you can use to determine whether your ads are hitting key performance indicators.
For example, with Facebook and Instagram ads, the most important metrics that you want to consider to determine whether your ads are successful and depending on your campaign objectives are the following:
CTR (click through rate) How many people are clicking on your ads in comparison to how many people have seen your ads? If this metric is too low, it means that your ad is underperforming.
CPC (cost per click) What is the cost you are paying for someone to click on your link? This amount is calculated by looking at the amount you have spent on one campaign divided by the number of people that have clicked on your ad. If this figure is too high, it means that your ad is underperforming.
CPL (cost per lead) When your campaign objective is lead generation, this is the cost that you are paying to acquire a lead. As a business, you need to understand how many leads you will need to generate in order to acquire a client and then what the value of that client is. From this understanding, you will be able to work out what is a sensible cost per lead. This can help you keep your costs to a minimum as well as ensure that you generate a good return on investment (ROI).
CPA (cost per acquisition) If your campaign objective is a sale, this is the cost that you are paying to acquire a client or make a sale. This number should be well under the amount that you make in revenue to ensure that you generate a good ROI. You may also see other metrics like CPP (cost per purchase) or CPS (cost per sale) which are essentially the same thing: how much you are paying to get a purchase or sale in comparison to the revenue that you make when the purchase or sale is made.
Once you understand your key metrics and you know your numbers, it is very easy to measure the success of your advertising if you are using Facebook or Instagram ads.”
“We have used magazines previously to aid the advertisement of some of our higher value properties, as research has shown us that our target market reads certain publications.
In the advertisements listed, we will put a unique coupon code for people to use if/when they visit the website. In addition, when people call in, all reps are obliged to ask where the caller saw the property advertised; any relating to the magazine are added to the tracking sheet which is uploaded to the inquiry and sales database daily. Our reps are extra vigilant on asking for the source when we currently have magazine ads live.”
“No matter the medium, the success of your advertising depends on two metrics: ROI on spend vs revenue attributed, and/or brand awareness and engagement. I say and/or because rarely should your organization run a single campaign to achieve both of those goals. They're completely separate and require different approaches to succeed.
ROI In order to effectively measure ROI, every advertisement needs to have tracking associated with it. Billboards need a specific phone number or webpage associated with the ad, social media and other digital ads need to have tracking links, etc. Before the campaign starts, you need clear goals and a clear timeline, because without expectations it is impossible to measure success.
Measuring Awareness This one is a little harder to determine. One way to approach this is to do some back-of-the-napkin math to determine how much an engagement or new set of eyes on your brand is worth in terms of dollars. If you can establish that, you're back to simply measuring ROI of revenue attributed to an ad.
Advertising is all about testing and reviewing, so if you're not going back to test the success of your campaigns you're just shooting in the dark.”
“Trying to measure ROI in this scenario isn’t worth your effort because you’ll never get close to accurate. Why? Two main reasons:
1. You usually won’t be able to capture the realities associated with the true costs that enable an ad, or the other touchpoints that may have had an influence. The cost of an ad is not simply the cost per click. How much did that landing page cost you? The article they viewed two months prior? How about the case study they viewed after the ad? How about the cost of winning that last project so that you had a case study in the first place? How about the trade show that person saw your company at last year? How many impacts are these various touchpoints having, and how many people are you dividing the cost by?
2. Even at a superficial level, if you’re in the B2B services realm, you likely care about lifetime customer value (LCV), which is generally pretty straightforward to measure in hindsight, but often super challenging to predict ahead of time. On top of that, LCV doesn’t cover many factors that determine the true value of a new customer.
So do yourself a favor and focus on obtaining and measuring SRLs (sales-ready leads).”
With the increasing amount of advertising mediums emerging, the number of ways to measure their success is increasing, too. It’s not always easy, but without measuring success, what’s the point of advertising at all?
Want to measure something new? Maybe it’s time to go back to the media buying process for round two.
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Daniella Alscher is a content marketer for G2. When she's not reading or writing, she's spending time with her dog, watching a true crime documentary on Netflix, or trying to learn something completely new. (she/her/hers)