How do Advertisers Measure the Success of their Campaigns?
Advertisers spend lots of money to get their messages out there. They want to know if all that cash is working! Are people seeing the ads? Do the ads make people want to buy stuff or do what the ad says? Advertisers must figure this out so they don’t waste money on bad ads.
Measuring how good an ad campaign is lets advertisers know a few key things:
- If they picked the right places to show their ads
- If the ads look good and say the right stuff
- If the ads are making people do what they want, like buying things
- How much money they’re making compared to how much they spent
Advertisers always check their ads to ensure they get the most bang for their buck. It’s a big part of running ad campaigns. Without measuring, they’d just throw money into the wind and hope for the best!
Setting Goals and KPIs
Deciding What to Track
First, advertisers must choose what they want their ads to do. This is called setting goals. Maybe they want people to buy a particular product, visit their website, or remember their brand. The goals change depending on the company and what it’s selling.
Once they’ve got goals, advertisers pick unique numbers called KPIs to track how they’re doing. KPI stands for “key performance indicator.” It’s a fancy saying, “the numbers that matter most.” Some common KPIs are:
- How many people see the ad (impressions)
- How many people click on the ad (clicks)
- How many people buy something after seeing the ad (conversions)
- How much money is made per ad click (click-through rate)
The KPIs match the goals. So, if the main goal is getting people to buy stuff, the essential KPIs will be conversions and click-through rates. If the goal is just getting the brand name out there, impressions might matter more.
Setting Targets
Advertisers don’t just look at the numbers, though. They set targets for those numbers, like “we want this many clicks” or “we need this many sales.” These targets help them know if a campaign is on the right track.
Setting good targets is essential. They can’t be too easy or too hard. Advertisers look at past campaigns, their budgets, and industry benchmarks to set realistic but challenging targets.
Tracking Performance
Using Analytics Platforms
Once the campaign starts running, it’s time to start tracking the numbers. Most advertisers use special computer programs called analytics platforms to do this. The big ones are Google Analytics, Adobe Analytics, and Kissmetrics.
These platforms are beneficial. They automatically collect data on how many people see the ads, click them, buy stuff, etc. Advertisers just have to log in to see all the numbers in one place. The platforms make reports and charts to help make sense of all the data.
Some analytics platforms can even track specific people. For example, if someone clicks an ad, the platform remembers them. Then, if they come back and buy something later, the platform knows the ad worked. This helps measure ad success over a longer time.
Tracking Links and Promo Codes
Advertisers use a couple of sneaky tricks to track their ads. One is using tracking links. They make special links for each ad that goes to their website. Then, they can see exactly how many people clicked on each ad link.
Another trick is promo codes. Advertisers put special discount codes in different ads. When someone buys with that code, the advertiser knows which ad they saw. Promo codes work great for measuring offline ads like billboards or TV commercials.
Analyzing Results
Calculating ROI
Woo, it’s time for some math! One of the most essential things advertisers calculate is RO—return on investment. It’s a way to see if they made more money than they spent on the ad campaign.
First, they add up how much they made from the campaign to get ROI. Then, they subtract how much the campaign costs. Finally, they divide that number by the campaign cost. The final number is the ROI, and it’s usually a percentage.
Here’s an example:
- An ad campaign brought in $1,000
- The campaign cost $100 to run
- $1,000 – $100 = $900
- $900 / $100 = 9
- The ROI is 900%
An ROI over 100% is good, meaning the campaign made more money than it cost. However, advertisers usually have an even higher ROI goal, like 500% or more. If the ROI is under 1100%, the campaign loses money. Ouch!
Comparing Benchmarks and Past Performance
Advertisers look at ROI but also compare their KPIs to industry benchmarks, which are the average numbers for all companies in their industry.
Looking at benchmarks helps advertisers see if their ads are doing better or worse than their competitors. They know they’re doing awesome if their click-through rate is way higher than the benchmark. But if their conversion rate is below average, they know they need to increase it.
Advertisers also compare each new campaign to their past ones. They want to see if they’re improving over time. If an old campaign got 500 conversions and a new one gets 800, that’s a good sign!
Making Improvements
Tweaking Ads and Targeting
Advertisers aren’t just tracking numbers for fun. They use all this data to improve their ad campaign. If an ad isn’t getting many clicks, they might change the words or pictures to make it more catchy.
They also use the data to target their ads better. For example, if they see an ad that does really well with women in their 30s, they might show it to more people. Or if an ad doesn’t do well on one website, they might stop running it there and try elsewhere.
It’s all about using data to tweak and improve the ads constantly. Modern advertising is as much about math and science as creativity!
A/B Testing
One super powerful way to improve ads is A/B testing. This is when advertisers create two versions of an ad and show them to different people. Then, they compare which version performed better.
Version A might have a blue button, and Version B might have a red button. Everything else is the same. The advertisers watch the numbers closely to see which button color gets more clicks. If Version B wins, they know to use red buttons!
Advertisers test various things, such as different pictures, words, website placement, target audiences, and more. They might make dozens of versions of an ad and test them all to find the best combination. It takes some time and effort, but it’s worth it.
The Future of Ad Measurement
New Technologies and Trends
The ad world is constantly changing. In the future, we might see ads in virtual reality or beamed directly into our minds! Okay, maybe not that last one. But new technologies are always coming out that change how ads work and how we measure them.
One big trend is personalization. Advertisers want to show different ads to each person based on their specific interests. They might use AI to analyze people’s online behavior and show them super-targeted ads. This could make measuring ad success much more complex.
Another trend is cross-device tracking. People use many devices today – phones, laptops, smart TVs, and more. Advertisers want to be able to track one person across all their devices. So, if you see an ad on your phone and then buy the product on your laptop, the advertiser will know the phone ad worked! This tracking will give advertisers an even fuller picture of their ad success.
Challenges of Accurate Attribution
Even with all these new tracking methods, advertisers still struggle with attribution. That’s figuring out exactly which ad led to a sale. If you see a bunch of Nike ads and then buy some Nike shoes, which ad made you buy them? Was it the last one you saw or one from a week ago?
It gets even more complicated when considering ads on different devices and platforms. If you see a Nike ad on Instagram, then on a billboard, search for Nike shoes on Google, and finally buy the shoes in the Nike app – how do you attribute that sale? That’s the attribution challenge advertisers are always trying to solve.
In the future, we might better track people across devices and touchpoints. But it’ll always be a little bit of guesswork. Human behavior is just too complex to attribute to specific ads perfectly.
Despite the challenges, ad measurement will continue to evolve to be more accurate and insightful. As long as companies spend big bucks on ads, you can bet they’ll continue finding new, better ways to prove their ads work! The science of ad tracking is here to stay.
