3 tips to measure the effectiveness of advertising campaigns
“Measurement is the first step to control, and improve.” If you cannot measure something, you cannot understand it, if you cannot understand it, you cannot control it. This quote from H. James Harrington is an obsession for marketers. Planning and executing activities respond to metrics and controlled decision making. But how do you accurately measure the results of a campaign? How much value does metrics bring when evaluating the effectiveness of different marketing tools?
Measuring success in marketing results is simple when you are just using a platform. But to gain a competitive advantage, marketers often conduct campaigns with more than one tool or marketing provider. Let’s use an example of a common performance approach. A professional today will use the following 3 methods simultaneously: Adwords, custom retargeting campaigns and display campaigns.
Within these models, in addition, they can use multiple channels also (for example, social, mobile). And, in addition, they can even use more than one provider for the same solution, for example, when using multiple retargeting strategies. When many of these sources are implemented, it is difficult to compare results significantly, since they are not always accurate in showing success or failure.
In most cases, our judgment is often to how many clicks each campaign generates. This may not be an accurate measurement, which leads to poor decision making and the results are far from optimum. For this reason, we have selected the 3 success indicators for tracking the effectiveness of advertising activities.
1) Measure Conversion Cost by Segment
Most marketers still use a study of metrics that do not fully correspond with what is really happening in your business. But when judging performance based outcomes they are not that much effective. The first step in analyzing the marketing activities carried out by suppliers is not checking visits or clicks, but finding a way to measure the cost of each action to be able to compare.
However, the metrics shown in different tools, especially in the case of retargeting panels, may not be comparable to each other. To calculate the results of each source, it is important to use an analytical tool (for example, Google Analytics). The trick here is to go deeper into your statistics and calculate the cost of conversion for each segment of users.
For example, in the e-commerce industry: There are the users who have never bought any products on the website, or returning visitors or those who have completed the purchase. By segment conversions, you get a clear view of the ROI of advertising expenses. Only by knowing these details one can estimate the average cost of a single conversion generated by the most important users.
2) ROAS / ROI
Every marketing professional wants to see a return on investment and optimize their advertising budget with that metric in mind. The reason is simple, knowing the relationship of what the ads have generated and the cost of those ads, we can easily assess how they contribute to business growth. By checking ROAS, you can decide how much volume it takes to be profitable and where to focus the time and budget of marketing actions.
If you can determine the scenarios in which we will have to pay more for each conversion to get more profit, then you will be able to optimize the existing budget. This will help to determine your campaign performance. Therefore, in most cases, if you do not want to invest too much budget in the long run and maintain efficiency in marketing activities, it is better to divide the marketing budget in the last click, which means that the direct channel will cost more. The budget should be increased once you figure out how to calculate and optimize ROAS.
3) Measure results by device
Marketers are always looking for alternative methods to handle the competitive pressures. By using many different sources, they have dozens of options in displaying the message of the company to the targeted audience.
However, considering the effects that we get with each advertising platform, we should not check the overall results, but examine them more closely and compare the data by each device.
In this way, marketers can get a valuable metric that tells us which are the best methods to attract potential buyers using computers, mobiles or even TV, seeing how these channels work and what their individual ROAS are.
From this, in turn, separate advertising activities or cross-device campaigns that are closer to business objectives can be planned.
The end result of a campaign is usually more complex than the sum of its parts. When multiple channels, platforms, and methods are used in a complementary way, campaigns can deliver better results. Measuring these results and accurately describing the effectiveness of a campaign is more complex.
By knowing which channel or platform that made the bottom line of business (ROAS and devices), you can plan and execute better marketing strategies. And that could not be done without the knowledge about marketing metrics.