Digital advertising metrics can be a little confusing, especially since most of these terms are bandied about as acronyms, but they needn’t be.
Although most digital platforms are free, such as search or social media, there are two key components that make these work better and can give your organisation a better chance of success, namely content and paid media.
The aforementioned, i.e. content is critically important as this is the strongest selling point a Non-Profit Organisation or Purpose-led business has.
If you are an NPO, how else does one encourage donors, sponsors and patrons to buy into your cause and support your organisation?
If you run a purpose-led business your customers need to know what you are all about!
Storytelling remains the single biggest driver for support in the purpose-led and cause-related domain. It’s your story and your purpose that engenders action.
Despite search engines and social media platforms being intrinsically free, however, what they don’t guarantee you is that your stories will be heard by thousands upon thousands of people.
This is the caveat to the online digital space. Investing in paid advertising is essential to ensure that your brand, its identity and your story reaches as many people as possible within your target audience.
In short, a good storytelling (content) strategy, combined with a solid paid media strategy can be hugely beneficial to the goals of a cause-related organisation to garner the desired support.
Digital advertising metrics help one make informed decisions when it comes to budget, performance and actions required.
Digital Advertising Metrics Explained
- KPI: Key Performance Indicator
KPIs are important to identify from the outset before a campaign is launched. These metrics are essential in determining both the goal of a campaign and to help one to make decisions and apply strategies to improve a campaign.
- CTA: Call to ActionÂ
A CTA is the singular driving action you want respondents to act on. This might be traffic to your website, donations, purchases, video views, read a blog or even volunteer.
- CTR: Click-thru Rate
CTR is an essential metric in the digital marketers toolbox. It tells us how many people who are presented with your content respond to it. This metric is used for any type of campaign including to track email marketing.
An average benchmark for CTR in 2023 is about 6.3%, but the higher the percentage, the better.
The formula for CTR is: Clicks/impressions x 100
e.g. 20 clicks from 100 impressions = a CTR of 20.
- CPM: Cost Per Thousand Impressions
CPM is an ad pricing metric used by social media platforms and display networks and is the most common form ad pricing.
One gets charged a set amount for every thousand times your ad is shown. The lower the CPM the better optimised your campaign is.
- CPC: Cost Per Click
CPC is predominately used for search engine advertising. Also known as PPC (pay per click), the metric holds value when your campaign is setup to pay each time a user clicks on your advert.
This cannot be used for display type campaigns (social media and banner adverts) as these function primarily on being show to as many potential users within your target audience.
The formula for CPC is: Total Cost = Clicks x CPC
- CPA: Cost Per Acquisition
CPA, also sometimes referred to as CPL (cost per lead) differs to CPC in that you pay only for the action taken e.g. a donation made, or a signup etc. In other words the goal is aligned with the campaign objective and you only pay when this action is met.
A caveat to this though, is that CPAs are a lot higher than CPCs and often limit reach since the goal of the campaign is to try and find people most likely to take the desired action you seek.
CPAs are effective when you have enough data to make informed bidding decisions and/or a strong remarketing audience to target.
- ROAS: Return on Advertising Spend
As the full name suggests, ROAS is a metric to determine exactly what the return on your ad spend is. It’s also a methodology used to forecast budgets before committing to a campaign by looking at ROAS benchmarks to realistically determine how much to spend for your desired outcome.
For a campaign to be deemed profitable (i.e. not costing you money) a ROAS of above 100% is needed.
The formula for Ros is: Â Revenue/Advertising Costs
e.g. R 2000 revenue / R 1000 ad spend = a ratio of 2:1 i.e. 200%
2023 average ad click through rates (CTRs) for paid search, display and social media.
MUST READS
- STORYTELLING THAT DOESN’T SUCK: BEYOND CONTENT MARKETING
- 5 FUNDRAISING VIDEO TIPS FOR NPOS, SOCIAL IMPACT CAMPAIGNS & FUNDRAISING
- WHY CONTENT STRATEGY IS CRITICAL TO SOCIAL IMPACT CAMPAIGNS
- FACEBOOK ADS – THINGS EVERY NPO, SOCIAL IMPACT CAMPAIGN & BRAND SHOULD KNOW
- THE ROLE OF AUTHENTIC CAUSE MARKETING: BUILDING TRUST AND CONNECTION