You can’t show that your marketing strategy works without the proper conversion metrics. Ad conversions may look different for various companies, but before we get into the meat and potatoes of measuring conversions. Let’s explain what a conversion is and how to identify what is best for your business.
What are ad conversions?
A conversion is a measurement taken when someone takes a specific action. That action can vary depending on your business goals. For example, a conversion for a B2B company may come from form submissions from a landing page or watching a specific video on a site. On the other hand, an eCommerce business may count when someone adds a product to their cart as a conversion, as well as completing the checkout process. Depending on the business objectives some conversions may be driven by purchases and others are in place to push consumers down the funnel. It is important to consider your overall business goals when deciding on what conversions you want to track.
Here are some common metrics to track conversions:
Lead Inquiries
If you are curious about how many people have signed up for your newsletter or submitted their information to receive a demo of a product then you will want to track lead inquiries. This is simply the total number of people who completed the lead inquiry action.
Click-through rate (CTR)
This measures how many people click on links on your website. You can use CTR in various marketing campaigns including paid advertising. It is calculated by dividing the number of clicks by impressions. CTR is a great way to understand how well ads are performing.
Ad Conversions Rate
The conversion rate is calculated by dividing the total number of conversions by the total number of visitors. The conversion rate will allow you to gain an understanding of ad performance. Additionally, you can separate the conversion rate into new visitor conversions and returning visitor conversions to see what may have attracted a new visitor to a page. On the other hand, you can gain an understanding of why a visitor may have returned and if they made a conversion.
Sales and Revenue
Understanding where your sales/revenue came from on your website will allow you to adjust your marketing budget to best-selling products or try to gain more eyes on other products/services.
Return on Ad Spend (ROAS)
ROAS determines the most and least financially effective campaigns. It is calculated by first subtracting revenue and cost then dividing the total by cost. If you have a negative ROAS then you should pay extra attention to the campaign. If you have a positive then your campaign is performing well by bringing in more than what you’re spending.
Cost Per Acquisition (CPA)
CPA is calculated by dividing the total marketing costs by the number of customers acquired. Calculating this expense shows how much it costs to acquire a customer. This metric provides information on the profitability of both marketing strategies and your business.
While implementing a new strategy, marketing creative is one of the first steps to producing a successful campaign. However, it is essential to know how your campaigns are performing. Setting up the right metrics will help you determine the success of campaigns and where changes need to be made to optimize them. If you need help setting up the right metrics for your company, contact Thumbvista today.