Introduction to advertising metricsManagement guru Peter Drucker is credited with saying, “What gets measured gets done.” Metrics are important to any business, small or large. When it comes to advertising there are many metrics, but a basic understanding of just a few key metrics can go a long way towards making your marketing more effective.

Keep it Simple

It would be easy to get bogged down in a myriad of metrics. There is certainly no shortage of metrics you can look at in any given business. When it comes to advertising, if you understand and monitor the most important metrics you will reap the benefits of keeping it simple.

Impressions

A simple definition of impressions is the number of times your ad is viewed. Impressions has been a metric used in traditional, offline advertising for years and many marketers believe it is still one of the most important metrics.  Reach and frequency go along with this number.  Reach is the calculation of the percentage of your target population that see your ad at all, and frequency is the average number of times each viewer saw it.

Clicks

A click is simply how many times a user clicks on any part of your ad. Clicks can be combined with impressions to calculate another metric known as clickthrough rate (CTR).

Clickthrough Rate (CTR)

Clickthrough rate (CTR) is simply the percent online users who click an ad. Thus, a CTR of 0.1% means that for every 1,000 people that see a display ad, one person clicks it. According to WordStream, in 2011 the average banner ad click-through rate in the U.S. was 0.1%. According to the marketing consulting firm Periscopix, Google’s display ad network has a dramatically higher clickthrough rate, averaging 0.4%, which were about eight times better than Facebook’s.

How important clickthrough rates are is much debated among marketers. After all, you can’t click through a television commercial, but that doesn’t mean they are ineffective. However, unlike a television commercial, you can’t fast forward past an online banner ad. This is illustrated concisely by Keith Pieper, founder of Pretarget, who said, “Your ad being seen matters more than your ad being clicked…” This brings us to impressions, the “being seen” metric.

Conversions

Conversions are measured by the conversion rate. Wikipedia defineds conversion rate as, “the ratio of visitors who convert casual content views or website visits into desired actions…” In short, it represents the percentage of people who took the action you wanted them to take as a result of seeing your advertisement. This is differentiated from clicks or clickthrough which measure any clicks, while conversions are only clicks that result in actions you specifically defined. Examples of what triggers a click being counted as a conversion would include downloading a white paper, signing up for your newsletter, or making a purchase.

View-throughs

View-throughs measure the percentage of your website visitors that were exposed to your ad. One of the challenges with this metric is that it just measures a web browser loading a page that contains your ad, so depending on where your ad appears on the page, the visitor to the site may not even actually see your ad. If your ad is below the fold, for example, and the visitors never scroll down, they will not have seen your ad. In this example, this visitor would still be included in the view-through figures, so some marketers argue that this metric is less useful than others.

Summary

There is a huge variety of metrics that can be used to evaluate the effectiveness of your overall marketing strategy. Understanding the strengths and limitations of a few key indicators and focusing on the right ones for your business will bring you better results than drowning in a sea of metrics that many people watch simply because they can. Our team works with clients every day to understand their unique needs and help them stay on top of the right metrics to track and improve their business. Call us for a consultation today so you can start improving results for your business.