Everyone knows how beneficial online advertising is – especially in this day and age. Millions of consumers use the internet every day and can be bombarded with different adverts. Targeted advertising ensures your ads are seen by the right people, but how do you know if they’re truly successful?
Business owners often look at metrics like impressions to see how often an advert is viewed. The more impressions, the more impressive the advert…right? Nope! Other metrics are far more integral to showcasing how well your ads are performing – such as the three shown in this guide.
Click-Through Rate (CTR)
The click-through rate tells you how many people click on your adverts after viewing them. It’s a key metric demonstrating how engaging your adverts are – a high CTR also shows your online ads are being presented to the right audience.
Low CTRs spell doom for an online business. Especially when coupled with lots of impressions or views. It means people are seeing your adverts, but nobody clicks them. From this, you can deduce that perhaps the adverts themselves aren’t up to scratch. Maybe you need to make them more engaging, encouraging more people to click on them. Or, it could tell you the wrong audience is being targeted; people see the ads, but they’re simply not interested in what you’re promoting.
Conversion Rate
An advert’s conversion rate is the percentage of people who follow a desired action after clicking the ad. This can be numerous things depending on the ad’s purpose, such as:
- – Making a purchase
- – Signing up for services
- – Joining a mailing list
High conversion rates show your advert performs exceptionally well. Not only is it engaging enough for people to click on, but it’s also got a good landing page to encourage the desired actions. Generally speaking, a poor conversion rate indicates the advert is pretty good at drawing people’s attention, but the landing page isn’t up to scratch. This is also a key metric from a cost standpoint – most online ads work on a cost-per-click basis, if people are clicking your ads but not converting, you’re basically losing money.
Cost Per Acquisition (CPA)
Your CPA is the amount of money spent to acquire a customer/lead. Ideally, this needs to be as low as possible. It’s arguably the biggest metric to keep an eye on as it tells you how cost-effective the adverts are. If your CPA is too high, you have to wonder if the adverts are worth investing in. Particularly if it costs more to acquire a customer than what they give back to your company. Many small businesses are encouraged to work with a Google Ads agency if their CPA is too high. Getting some expertise on deck will help you figure out smart ways of reducing the costs of acquiring customers/leads.
Online advertising campaigns can be overwhelming as you see so many metrics and stats. See through the noise by focusing on these three and they immediately give you a clearer picture of how things are. It’s a lot easier to tell if your online ads are truly successful or a waste of money.
