In the age of modern digital advertising, information is king. Marketers aiming to maximise return on investment from their digital advertising must analyse a variety of tactics and metrics associated with each channel and strategy as well as stay up to date on optimal strategies for their objective.

However, relying solely on traditional metrics such as clicks, impressions or click-through rate (CTR) and static strategies can be doing a disservice to the success of a digital advertising campaign.

Useful benchmarks

Upon reviewing performance metrics of campaigns on its platform last year, Choozle noticed a few trends based on metrics of targeting (audience), creative and cost/budget (or CPMs). These are the starting point for any digital advertising campaign and they are primary variables to guide marketers through the implementation of all campaigns.

The performance metrics from targeting, creative and cost (or CPMs) can also provide benchmarks to optimise for successful campaigns. Metrics like click-through rate (CTR), overall clicks, impressions and cost per acquisition (CPA) can be specific and subjective to individual campaigns. However, performance metrics related to targeting, creative and CPMs can provide useful benchmarks on which marketers can effectively optimise. It’s important to remember that these metrics are all interdependent.

Choozle’s Digital Advertising Findings & Best Practices Report found the following key trends:

  • CTRs performed best when campaigns focused on retargeting and contextual targeting, which logged a $2 CPM value. IP (Internet protocol) and data targeting had an even higher CPM value, at $4
  • With data targeting and IP targeting, there is a higher CPM (closer to $4.00) than geo-targeting and contextual targeting (closer to $2.00)
  • Display ads that averaged 728 x 90 and 300 x 250 in size had the best value for mobile and display advertising, both coming in at $2.22
  • By contrast, video CPMs had a much higher average value. For example, a video display ad sized at 1920 x 800 had the highest average at $13.65.

Relying on CTR

Many marketers still rely on clicks or CTR to evaluate their digital media spend. This is because marketers could easily pull reports that showed ‘results’ to their clients. The problem with a click-oriented measurement approach is that it ignores the contributions of any previous ads and only focuses on a very short period of time. The exposure to online display ads may increase the likelihood that a consumer will make a site visitation.

But click-through rates do not take into account that convincing consumers to take a meaningful business action is a process, which takes place over time. Furthermore, the quality of clicks can be quite different and solely optimising to CTR can increase exposure to bad quality traffic.  

Marketers should look at a comprehensive view of their performance metrics for optimisation instead of evaluating a singular metric individually. Combining the CTR in evaluation with CPMs and impressions provides a better understanding of how successful you are at reaching your target audience and driving business results.

Like all marketing efforts, there is a range of KPIs and goals that marketers can use to judge the performance of their campaigns. The various KPIs and aims all have their strengths and weaknesses and will give marketers different insights into how the campaign is performing as well as what the business end goal is.

Rule of thumb

Marketers must synthesise at the complete array of campaign metrics to properly leverage for optimisation, and campaign optimisation should be aligned with measurable business goals.

Thus, instead of focusing on CTR, the marketer and their agents should measure and optimise against how the campaign directly drives sales, downloads, and/or other verifiable business goals. But remember, don’t overdo your optimisations. A significant advantage of programmatic advertising is the availability of real-time reporting. The ability to access it means marketers can then actively optimise programmatic campaigns on an ongoing basis, which in turn maximises performance.

The best rule of thumb in programmatic advertising is to allow the campaign to run for enough time in relation to the budget before doing any optimisation. Although the amount of time is related to the scale of the budget or campaign, most of these should run approximately a week before embarking on an optimisation journey, based on your performance metrics.

All things being considered, campaigns with longer duration allow for a more patient and deliberate approach to both the auto- and human-based optimisation, typically resulting in better overall performance.

As we move further into 2017, marketers will continue to leverage digital programmatic advertising to generate the greatest return on investment for their ad spend. Today’s platforms empower media buyers to leverage reliable benchmarks to evaluate campaign success and to apply best practices to their campaigns to ensure optimal success.