Digital Marketing Reports - What to Look For
Let's face it, digital marketing reports can be confusing, especially when they are overloaded with data points. In today's blog our goal is to help clear up any confusion and help you focus on the metrics that mean the most for your business. We'll also help shine a light on what to look for to make sure your agency is providing an accurate representation of your true incremental return on investment.
The Metrics
In any digital advertising report, regardless of the channel that is being invested in, the following metrics should always be present. These metrics will help give you a pulse on how healthy your campaign is running and if you may need to pivot to maximize the results for your business.
1) Clicks
The clicks metric will tell you how many people have interacted with your ad, whether a digital display banner, search ad or social media campaign. Years ago this metric was what many marketers defined as success on a campaign. However, in today's digital age with the tools available to us, clicks are only a small part of your campaign success. In fact, high click volume can even be a bad sign if those clicks aren't converting. High clicks without conversions essentially tells us that our targeting needs to be refined.
2) Impressions
Impressions are a measurement of how times your advertisement has been displayed. While this is often the key metric for a branding campaign, it is very important to understand the nuances of an impression. For one, just because an impression (ad) has been served doesn't mean that the impression reached a unique individual, nor does it mean that the individual has actively viewed your ad. Be sure to ask your agency to provide a viewability report which will tell you if the ad was truly actively viewed, meaning it was fully on their screen long enough for them to be influenced by the branding.
3) Click Thru Rate (CTR)
Often abbreviated as "CTR" the click thru rate on your campaigns is the number of clicks divided by the number of impressions. This metric is important to monitor because a well-run campaign that is targeted effectively will have a higher click thru rate. If optimized properly, not only will your ads be getting in front of the right audience but your advertising costs will be dramatically lowered. Improving this metric can truly bring great results to your ROI.
Benchmarking this metric can be difficult as each ad size and channel tends to have different click thru rate averages. However, the benchmarks below are a great place to start:
Search Advertising - Your click thru rate should be at least 8% but preferably closer to 12% or higher.
Display Advertising (Web) - For web based display advertising you should have a minimum of 0.10% for your click thru rate, preferably closer to 0.14% or higher.
Social Media Advertising - For social media campaigns on Facebook or Instagram you should aim to have a click-thru rate of roughly 2-4%, higher for news feed ads and lower for right-hand column.
4) Cost
The cost metric represents the total cost of the media purchased for the campaign. As we talked about in one of our recent blogs, be sure to ask your agency if they are marking up this cost in any way. This unfortunately is a very common agency practice in digital advertising that could be costing you enormously with your ROI.
5) Conversions
The bread and butter of the digital marketing report is conversions. This represents the ultimate goal of the user acting on an ad and taking the action you desire. Typically this is a transaction but it can also be a phone call or a sales lead form being filled out. The best agencies will optimize toward this metric above all else because this is how we can drive a strong return on investment for your business.
While conversions are the ultimate indicator of a strong performing campaign, not all conversions should be weighted equally. In the digital advertising world there are click thru conversions and view thru conversions. Let's review what each of these conversions represent and why it's important to have them broken out in your reports.
Click Thru Conversions - Click thru conversions are conversions that happen directly from a click on one of your ads. Because the user is taking action by clicking the ad and then purchasing it's safe to say that the advertisement is what drove that purchase and/or lead and thus it is fair to take full credit on the transaction.
View Thru Conversions - View thru conversions are conversions that happen after someone has seen one of your ads. It is important to note that although the user saw the ad and then ended up converting, they did not click the ad to order. This means they eventually purchased through another channel, whether an organic search, directly typing in your website URL, an email, etc. While some percentage of view thru conversions can absolutely be credited to an incremental transaction, taking full credit on each view thru is a very inaccurate way of reporting and a common way agencies try to inflate their ROI numbers.
We recommend that if your agency is taking full revenue credit on view thru conversion that you ask them to run an A/B test. This can be be easily accomplished by serving a percentage of the digital display ads as a generic creative that doesn't feature your branding. The agency can then compare the conversion uplift between the true creative and the test creative to understand how your ads are truly influencing purchasing behavior. A general rule of thumb is that typically only about 1 out of every 4 view thru conversions is truly incremental and the other 3 users would have purchased even if you weren't advertising at all.
6) Revenue
If your business is taking orders online this is another crucial metric to have included in your reports. Revenue will show you the total amount of money generated from your campaign(s). When a user clicks on an ad and makes a purchase the order values are sent back to the digital marketing platform which allows agencies to measure sales results.
7) Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) is calculated by dividing the revenue of the campaign by the cost. This will help us understand exactly how effective the campaign is performing. An optimized campaign should have an ROAS of at least 4/1, meaning $4 has been generated in sales for every $1 spent in advertising. Although a 4/1 is recommended as a minimum, many campaigns can achieve an ROAS as high as 15/1 or more! That is the power of digital marketing, by honing our targeting methodologies and maximizing efficiency we can create very targeted and effective advertisements that will rapidly grow your business.
Summary
Measuring your digital advertising campaigns is crucial to the success of your business and having a complete and effective weekly report will help you keep your agency accountable for bringing the results you expect. In addition to the metrics above that are important to have in a weekly reporting format, we also recommend that you request that your agency lists out improvements that they're making with at least a monthly cadence. This will help you see how little changes can bring big results as ads and targeting are refined.
Interested in learning more about how Trustworthy Digital can help your business achieve success in digital marketing & analytics? We would love to chat with you. Simply fill out our contact form by clicking the link below and we will get back to you as soon as possible.