Welcome to our Digital Marketing Analytics guide, where we try and explain everything you need to know about key metrics in the online advertising industry. With so many different places for you to advertise available, we know it can get very confusing to tell if your adverts are actually doing well.
Don’t worry, we’re here to help.
A metric is simply something measurable. For example, your height, or how many steps you’ve taken today are metrics about you.
In online advertising, metrics can be simple things like the number of clicks on an ad or the revenue from an ad. With either of these examples, more is always better.
They can also have more complicated relationships with each other. By this, we mean that sometimes advertising is a trade-off between two different desirable things, for example, people watching a full video ad, or clicking on it. When someone clicks on a video ad, they are taken away from it so they can’t watch the whole thing. People watching a whole ad is often an advertiser’s goal. If you want people to go to your site, however, then having them watch the whole of your ad but not interact is a poor consolation prize.
This is just one example of how although one ad can appear to be the best, with a bit of investigation the reverse turns out to be true. Here is another more fleshed out example:
Digital Marketing Metrics Analysis Example
Say you run two ad campaigns using the same ads (and which cost the same per click). You receive the following results to analyse, and decide where you will spend your advertising budget on an ongoing basis:
|Ad Placement 1||1,000||100,000||1%|
|Ad Placement 2||100||1,000||10%|
Ad Placement 1 had 1,000 clicks while Ad Placement 2 had only 100 clicks – this means Ad Placement 1 did 10x better for clicks. On top of that Ad Placement 1 received 1,000x more impressions, so it’s clearly the winner here. Isn’t it?
Well not necessarily. Whenever Ad Placement 1 appeared, the CTR shows that only 1% of the time did someone clicks on it, whereas for Ad Placement 2 10% of the time someone clicked on it. This implies that people were 10x more interested in Ad Placement 2 than Ad Placement 1. In a lot of cases, this would clearly mean that Ad Placement 2 is the better ad, and all of your advertising budgets should be spent there.
However, what if Ad Placement 2 only had 1,000 impressions available each month, but Ad Placement 1 has 1,000,000 impressions available? While it would still make sense to invest in Ad Placement 2 for the improved engagement, Ad Placement 1 can provide 10,000 clicks per month (vs 100 on Ad Placement 1). If you are looking for more visitors to your site, then this would have to be a major consideration.
However again….only joking. A discussion like this could swing back and forward indefinitely as more metrics are added to consider. This is why whenever using advertising you have to decide what your goal definitely is before you start. If you are looking for visitors to your site, then clicks is likely the way forward.
Understanding every other metric available should help you reach that goal, not divert you to a new one.