Programmatic Media Buying 101: Digital Marketing KPIs

Programmatic Media Buying 101: Digital Marketing KPIs

How can you measure the performance of your campaign?

In the past, there was little way to measure the impact of billboards or magazine advertisements other than general brand lift or the use of redemption codes. Now, the dawn of digital media provides advertising buyers – and sellers – with new ways of measuring performance.

 

Click Through Rates: CTRs

As advertising technology has evolved, the metrics have become more meaningful. Early on, click through rates – or CTRs – were groundbreaking. CTRs pinpointed the percentage of viewers clicking on ads, essentially indicating the level of interest.

CTR Programmatic

Today, CTRs still provide valuable information, but advertising technology has since transformed – in the way it’s bought, sold,delivered and measured. Programmatic matches ads to viewers, one-to-one in real-time. It provides access to advanced reporting options but with so many options, it can be hard to know what metrics are meaningful.

Click through rate is calculated based on the number of clicks divided by the number of impression – or views – served. This is a standard in digital advertising and often the KPI that drives optimization of creative or ad placements, or where on a website or app the ad appears.

 

Impressions: How efficiently did this ad engage your target audience?

programmatic KPIsMeasuring and assessing the actions of viewers is at the center of the metrics universe. Frequently, campaigns are bought and sold based on the number of impressions. The rate for a campaign bought by impression is called CPM, cost per mille – or cost per thousand. Most of the time, people think of the CPM as being the rate at which impressions are sold.

Clicks also help measure the level efficiency via the KPI cost per click, or CPC. As a programmatic KPI, CPC can give the advertiser insights on just how well the ad performed each time it was served.

 

What happens after someone sees your ad?

But the metric story doesn’t end with that first click – it’s the metrics beyond the click that are most meaningful to today’s digital marketers. Post-click actions are usually a main campaign objective but these rely on that initial click and are often referred to as conversions.

When someone in the target audience clicks on the ad and arrives on a product page either to purchase or take another action, then the advertiser’s goal is reached – that action is also known as conversion. A conversion can be anything from downloading a white paper to making a purchase.

 

Conversions: How well does the ad motivate the viewer to take the desired action?

Conversion rate in itself is an interesting metric. It’s calculated by dividing the total number of conversions by the total number of impressions, then multiplying by 100.

The conversion rate’s deeper value lies its role in calculating the cost per acquisition – meaning when the conversion action turns a prospect into an acquired customer – or acquisition. Impressions, CTR and CR all come into play here.

 

Measuring the Prospect’s Interest

Media_Buying_Self_Service

 

In order to then decipher how the campaign turns the target audience into a customer, CPA, cost per acquisition, like CPCs act as both a cost rate or a KPI.

Not all KPIs double as cost rates and some are more qualitative. Completion rates evaluate the performance of video ads – how much of the ad viewed corresponds – at least in theory – to how interested or engaged the viewer is with the video.

Completion rates are only half the battle. Other KPIs, like CPA or conversion rate need to paired with completion rate. Watching a video ad in its entirety does not measure whether the viewer clicked through to the landing page, signed up or purchased.

 

Summary

Understanding the array of programmatic metrics is just the beginning. Balancing all the KPIs and making sure the campaign has been optimized correctly while meeting both the advertiser’s goals as well as your goals takes practice and attention to detail.

  • Impressions do not only define reach, but also play a large role in the calculation of other metrics.
  • CPC can provide insight into reach and the efficiency of creative and placements to get the attention of users and drive clicks.
  • Conversion rate is meaningful, but reveals more as part of the equation of assessing just how efficient a campaign is at acquisition or CPA.
  • Completion rate helps to measure engagement and as a KPI can help advertisers lower their CPC or CPA KPIs.

 

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