Launching ad campaigns without having clear goals and objectives in mind can lead to waste of time and resources. Who knows – you may even miss out on some opportunities.
To avoid such situations, marketers must possess a crisp understanding about the various marketing metrics to track before, during, and after the completion of their campaigns.
Businesses can improve their understanding about the performance of their ad campaign and make data-driven decisions to improve their strategies.
These metrics will provide insights into how well the ads are performing and if they are achieving the desired goals.
Before you take a deeper look into the important marketing metrics, let’s get a quick understanding about what these metrics actually mean in general:
What are Marketing Metrics?
Marketing metrics are a set of measurements and data that businesses use to understand how effective their ad campaigns are and how to improve them.
It tells you who your target audience is, what they’re into, and where they’re coming from.
They help us keep an eye on specific goals we’ve set, called key performance indicators (KPIs). These KPIs are the measures that tell us if we’re moving closer to our desired results or not.
And with all this statistical data, you can make smart decisions and fine-tune your marketing strategies to make a mark in the market.
But, what metrics should we consider in order to track advertising campaigns?
Well, we have listed down some important metrics that you can keep in mind while tracking your advertising goals
7 Key Marketing Metrics you must keep in mind
1. Reach and Impressions
The first and foremost thing to know is how many individuals are exposed to your ad and how many times your ad is being displayed to the audience.
It shows the potential size of your campaign and measures the visibility of your ad positions.
Keeping a keen eye on the reach and impressions of your ad creates a foundation for tracking your advertising goals.
You can make informed decisions about the targeting and frequency of your advertising campaign.
For tracking this metric you can use tools like Google Analytics and social media analytics platforms.
2. Click-Through Rate (CTR)
CTR shows the number of people who clicked on your ad vs the number of people who saw it.
It is one of the great metrics to track the number of individuals who are taking action on the ad.
You just need to know the number of clicks and number of impressions to calculate the CTR,
CTR = (Clicks / Impressions) * 100
For example, let’s say your ad received 50 clicks and generated 400 impressions:
CTR = (50 / 400) * 100 = 12.5
12.5% CTR means that out of every 400 times your ad was shown, it was clicked 50 times.
If your CTR is higher, it means that your ad is connecting with your audience and encouraging them to take action. You can use these metrics and plan your ad campaign accordingly.
3. Customer Lifetime Value (CLV)
Another underrated marketing metrics to track is Customer Lifetime Value or CLV.
CLV, as the name suggests, helps businesses understand how much money a customer will bring in the entire period of time they stay as a customer.
With CLV, you can find your most valuable customers and adjust your advertising strategies accordingly. It is a great way to attract and retain similar high-value customers.
Here, preparing a deliberate brand strategy and planning to build customers’ loyalty throughout their lifetime can strongly help build a deeper connection with your brand.
If you know that, each customer brings along a value of $80 for an average of 3 months, imagine spending an amount of $20 to bring in those customers.
This means the ROI on your ad campaign will be 1200%.
4. Conversion Rate
A conversion is when an individual completes the desired action set by the advertiser and conversion rate is the percentage of the conversions being made.
Through the conversion rate, you can evaluate the quality of your traffic and the efficiency of your landing pages.
To calculate conversion rate: (number of conversions/number of clicks or visitors) * 100
For example, assume that 250 people clicked on your ad, and out of that 40 people made a purchase, so your conversion rate will be 16%
Conversion rate makes you understand how effective your ad campaign is in getting people to complete a specific goal.
Using advertising videos in your ad campaign can improve the conversion rate by up to 80%.
5. Return on Advertising Spend (ROAS)
ROAS is the amount of money we spend in return for the money we make through ad campaigns.
It gives us clarity about how profitable and efficient our advertising campaigns are.
ROI = ((Revenue – Cost) / Cost) * 100
Let’s understand by taking an example, suppose the revenue you earned from the ad is 60$, and the cost you spend on that ad is $15. So your ROI will be $300
This clearly means that for every dollar you spent, you made a return of $3.
If your ROI is positive that means that you are earning more than you spend on your ads. It shows that your efforts made in the ad campaigns are paying off and you are gaining profits.
6. Cost per Acquisition (CPA)
The second-last marketing metrics to track is all about CPA.
It talks about measuring how much it costs a company to acquire a new customer.
Calculating it on a regular time period gives an overview of how much a business should spend on signing up each new customer.
To calculate cost per acquisition, here is a simple formula
CPA = Advertising cost/ No. of new customers
If the overall spend on your advertising is 1500$, you were able to acquire 1500 new customers from it, then your CPA will be $1 per customer.
It is important to note whether the CPA is aligning with your marketing goals or not.
If your CPA is of lower value it means that your ad campaign is cost-effective and it will bring your customer in a profitable price.
But, if the cost per acquisition is higher then you should focus on improving your ad strategies.
7. Bounce Rate
The percentage of people who click on the ad and then leave without taking any action is called Bounce Rate.
It tells us how many people left without exploring the website.
Bounce Rate = (Total visitors with no interactions / Total number of visitors) * 100
If the bounce rate is high, then it means that your website or ad was not able to capture the user’s attention.
You can’t ignore the fact that the average human attention span today is less than 10 seconds, and you need to hook your audience in that amount of time.
You have to work on your ad and website to encourage your visitors to stay longer.
Identifying bounce rate is very important as it helps us to understand that your website needs improvement and one can work accordingly to give a good user experience.
Keeping an eye on your ad campaigns can help you run your ads effectively.
Here, knowing which marketing metrics to track can not only help improve your ad’s performance but also assist you in planning your future campaigns better.
It will help you in achieving the advertising goals and clock a valuable return on your ad spent.