When you put money into something, you need to see returns. No one wants to spend their advertising efforts on a campaign when they have no idea whether that return will actually benefit their brand. But unfortunately, when it comes to paid ad campaigns, too many companies simply don’t know what to track in order to measure their return on investment.
That’s a challenge, but not an unsolvable problem. One of the best parts about Google AdWords, Facebook, LinkedIn, and other types of paid online ads is the fact that they are inherently measurable. Set up your campaigns the right way, and you will know whether or not the budget you spend is actually working toward your intended goal. You can track the right metrics, make the right adjustments, and maximize ROI from your paid ad campaigns.
Start With a Goal in Mind
First things first: the only way you can measure ROI of your paid ad campaigns is by defining what that “R” should actually be. In other words, do you know exactly what would constitute success?
Advertising campaigns can have a variety of goals. All of them are related to growing your business, but their path to that success can take a number of shapes. You might be looking to grow brand awareness, website visits, new customers, or customer retention.
Your first step should be finding one overarching goal, then choosing the metrics that most closely track your progress toward achieving it. The most common metrics for paid digital ads are:
• Total ad impressions
• Total unique reach
• Total clicks and click-through rate
• Total conversions and conversion rate.
All matter for every campaign, but it makes sense to choose one of these as your single most important for a given effort.
Set Up Your Tracking Options Ahead of Time
Once you know your goal, it’s time to start working towards actually achieving it. Most online ad platforms, from Google AdWords to Facebook’s Ad Manager, offer internal tracking opportunities that already fulfill this need for basic metrics. Still, it makes sense to actually dig deeper for true success.
For instance, The Facebook “pixel” is an analytics tools that will allow advertisers to measure the effectiveness of their ads by understanding the unique actions people take once they land on a landing page. When implemented, tracked, and optimized correctly, advertisers are able to use pixel to ensure they are seeing maximum ROI from their ad campaigns.
Another way to track the ROI of paid ad campaigns is through the use of UTM tags. A UTM tag can be set up to track each visit on your website through their entire journey. It also makes sense to combine UTM tags with Google Analytics Goals, which should align with the goals you have set for your campaign.
Understand What Constitutes True ROI
As you set up your tracking capabilities, it makes sense to keep in mind that what you are tracking as ‘success’ is not necessarily true return on investment. For instance, your overarching campaign goal might be brand awareness, which you track through total unique reach. But how do you know whether the people you reach actually learn about you to the point where they become customers?
True ROI is determined through nothing more or less than actual revenue grown from a specific ad. If that revenue outpaces your total investment in that ad, you can consider it successful. In many cases, it’s difficult to track this true ROI. However, that does not mean it’s impossible.
Google Analytics, once again, can be immensely helpful in that regard. You can attach a monetary value to each of the goals you set for your individual campaigns. Now, all you have to do is calculate the average value of a customer, and you can determine true campaign ROI in addition to your campaign goal.
Align Your Paid Ad Campaigns Throughout the Funnel
You might have noticed that none of the above steps are connected to writing and designing your actual ad. They are, in a way, the leg work you need to do in order to make sure that when it comes to this step, you are well prepared for success.
Now, it’s time for the actual set up. Here, you have to make sure that each of your ads makes sense not only in isolation, but within the context of the larger buyer’s journey. When users see your ad, what other content might they have already been exposed to? What do they see when they click on the ad, and will the message be consistent? Once they convert to leads, are you making sure you are effectively funneling them toward becoming customers?
All of these are crucial questions to answer. No paid ad exists in isolation. For true success, you have to make sure that your audience is effectively and slowly guided in the direction you want them to go. To ensure that is the case, it makes sense to set up so-called ‘sub goals’. Even if your ultimate goal is conversions, impressions and click-throughs can tell you exactly how your ads are performing in getting them to that final point.
Measure and Adjust Continually
Finally, and perhaps most importantly: no paid ad campaign can be successful without the ability to measure your efforts, and routinely make adjustments that maximize their potential. A/B testing, for instance, helps you test different visual and message variations to finds the ones that resonates most with your audience.
Within your campaign, you may find one ad or channel outperforming the others. In that case, it makes sense to focus more of your budget on this variation. Rather than setting up a campaign and only measuring its success at the end, consider regular ‘checkpoints’ at which you can determine whether these or other adjustments are necessary.
When you get into the paid ad game, you need to make sure that you can actually compete. AdWords, social media, and PPC in general are so beneficial because they reach your audience where they spend their time, and you can easily measure success. Are you ready to take the leap? Contact Mediaboom and see how we can help you achieve maximum ROI from paid ad campaigns.