How does one evaluate the purchase of digital (web/email) advertising opportunities?
- Aug 28, 2013 8:59 AM
I work for a B2B services company with a long sales cycle. We would like to shift most of our advertising efforts from print to digitial. We are constantly bombarded with opportunities (i.e. banners, emails, leaderboards) and presented with numbers/metrics "chosen" to make the opportunity sound good. I put chosen in quotes because it's a game of sales. They approach the numbers in what ever way will make them look best. It makes it difficult to compare opportunities and see through the "sales pitch" if you will.
I know I need to collect metrics and ask questions, but what metrics and questions matter and which do not matter as much? How do I evaluate those metrics in comparison to their cost?
Ad space comes and goes at random and so quickly that I need a more organized approach that will help us with the decision-making process.
5 Answers
- Aug 28, 2013 9:49 AM
Hi Lori, Great question. The metrics that you need to focus on depend on what your objective is for the advertising that you are doing. The three most important objectives are: 1) Visibility 2) Lead Generation 3) New product/service launch. For visibility the key metric is eyeballs or impressions on the advertiser's site and web traffic to your site. For lead generation the most important metric is click throughs to your website, landing page and/or offer, whether that is free trial, free download or demo. For a new service announcement, the key metric is pickup -- by news sites, key bloggers or social influencers in your space and your social community. Cost is trickier because it varies so much. That said, two good metrics are the size of the audience you will reach with this placement (how many eyeballs again) and (if search related) the competitiveness of the search term or key word in your industry.
- Aug 29, 2013 5:41 AM
Great points Clare. A few other metric that are being increasing used to compare various media channels from a cost standpoint are CPM (Cost Per 1,000 Impressions), CPL (Cost Per Lead/Conversion), and CPA (Cost Per Acquisition - this metric divides the total cost of the advertising by the number of new customers acquired from that advertising channel).
We have a few tools that can help with tracking these metrics such as our Campaign Impression Calculator and Lead Generation Metrics Dashboard. We also have an Advertising Calendar & Budget to help you track and plan for advertising opportunities. Additionally, we could provide deeper advice on an Analyst call or build a custom dashboard based on your specific needs. I hope helps!
- Aug 29, 2013 1:04 PM
Thanks Jesse! Of those, the one that has the most bottomline impact is the CPA (Cost Per Acquisition). It is critical to know the cost of each new acquired customer so you can adjust your marketing spend rate across different market segments.
- Nov 3, 2013 4:56 AM
Lori,
Hello. I would abandon most of the metrics people are using to try and sell you digital advertising. They are typically vanity metrics, as useful as "how many Twitter followers do you have-more is not better". First, you need to make sure you have the systems in place to effectively measure inbound leads from digital on your own. At a minimum, you need to be able to develop specific landing pages for each medium you use as well as the ability to generate a tracking url that you'll give to the advertiser for each advertising vehicle. Doing this allows you to reconcile what the vendor tells is happening against what you see.
Don't be afraid to ask the vendor how other people are performing on the site and how their ads are performing.
Second, you need to take a look at the demographics, personas and volume of people
Finally, regarding metrics I'd suggest the following.
Impressions - You' can't control much here, but you'll know how many times your ad is presented.
Clicks/Click Through - The design and relevance of the ad have a lot to do with this metric. I would not expect more than a 1-2% click through rate unless you have an amazing offer.
Marketing Qualified Leads - How many of the clicks convert to form conversions on the website.
Sales Qualified Leads - How many leads are qualified by the sales team as being viable, though the timing may be off.
Sales Ready Leads - Leads that are qualified and their timeline for making a decision is within a time frame that can impact your current sales goals.
This model allows you to measure which mediums are delivering the most value where it matters, at the salesforce level.
P.S. When placing ads, buy the best position you can afford, large and above the fold. Also, many digital advertisers will allow you to use a little piece of code and rotate the banner, so you get two messages in front of the viewer.
P.P.S. If you're not working with an agency, don't be afraid to ask for a discount. Most advertisers have 15% built into their pricing as a referral bonus for agencies. Make sure to ask for the agency discount.