Unless you live under a rock or insist on using an ad blocker to declutter your Facebook feed, chances are you’ve come across display advertising while searching online.
From leaderboards and half-page sizes to rectangle ads large and small, display advertising relies heavily on creative visuals and bold graphics to get consumers’ attention. Display campaigns have proven themselves rewarding marketing strategies when done effectively. But how exactly can you evaluate a display campaign’s success?
Marketers use key performance indicators (KPIs) to gauge whether or not a particular advertising campaign performs well. Whether your goal is to build brand awareness, draw potential customers, or drive action, monitoring these four KPIs will keep your display campaign headed in the right direction.
Recently I was reading an article about smartphone security, and a display ad for IBM popped up on my screen.
When an ad appears, it creates an impression. Impressions help you quantify how many times an ad appears on a web page. An impression is simply a view. Viewers don’t have to click, hover, or engage with the ad for an impression to occur.
Recording a large number of impressions shows that your ad is reaching a wide audience. More views increases the chances for conversion. But if you find that other KPIs, such as engagement, don’t grow along with your impression rate, you may want to rethink your display campaign strategy. Pay attention to the placement of your ad, when it should be visible, and your target audience to increase your chances of conversion.
Impressions can help build brand awareness. According to Vantage Local, having the same ads appear wherever people browse fosters brand familiarity and recall. Chances are, if the ad stood out in a creative way, people will remember its message.
I didn’t click IBM’s ad, but now I know the tech company offers a cloud service.
So, we know the IBM display ad appeared while I was browsing, and we know its appearance marks an impression. But its presence also provides another KPI metric: reach.
Reach measures how many people see an ad. For display advertising, this KPI quantifies the number of unique views a particular ad receives. A unique view means that a single person viewed your ad once. Having the same person view the same ad twice does not amount to two reaches.
Since I saw the IBM ad on my computer, I count as one reach. If I see the same IBM ad again on a different website, I don’t count as an additional reach.
Keeping an eye on reach metrics ensures that you’re not wasting time or money by showing ads to the same person. Again, this may help with brand awareness, but if the wrong person keeps seeing your ad, you may be missing out on the people that matter. With more people experiencing ad fatigue, you’d be wise to tailor your display campaign to reach your intended market.
3. Engagement Rate
Usually expressed as a percentage, the engagement rate indicates how many people interact with a display ad. This could be a simple action like hovering over an ad, or in the case of rich media, something more complex such as watching an embedded video clip or listening to audio.
The display ad for Amazon Instant Video above is nestled nicely within the site’s contents. Clicking the ad will trigger a short video preview for this particular show (and let you see cool footage of elephants).
Every time a person clicks on the video player, they engage with the ad. Amazon can use this information to determine if the ad’s creativity captures people’s attention.
High percentages of engagement strongly correlate with higher conversion rates. If a person expresses interest by playing around with an ad, they might want to learn more about what’s being offered. Having interactive elements in your display campaign can drive up engagement percentages and potentially increase consumer participation in the long run.
4. Click-Through Rate (CTR)
Some experts argue that tracking click-through rates (CTR) is a waste of time in an ever-changing Internet culture. Sure, the practice might seem outdated as display ads compete with newer digital advertising methods, but CTR is still a valid KPI.
Basically, CTR lets you see how many people click on your ad after seeing it. Like engagement rates, CTR is recorded in percentages. It’s calculated by taking an ad’s total number of clicks and dividing it by the total number of impressions.
Let’s say you see that Amazon Instant Video ad, and because the elephants in the video are so cute, you just have to put “The Wonders of Nature” in your video queue. You click on the “Add to Watchlist” button and in seconds, Amazon takes you to the series landing page. Amazon records your action as a click.
Your click is measured against how many impressions the ad generated. If the resulting CTR is high, then Amazon can conclude their campaign is successful. A not-so-high CTR might mean that Amazon should rethink their display campaign approach; changing up the ad’s creative or copy might make a difference.
Still a little confused? Here’s a breakdown of what each KPI measures:
Impressions. How many times an ad appears.
Reach. How many people see an ad.
Engagement Rate. How many people interact with an ad.
Click-Through Rate. How many people click on an ad.
Although each KPI is important on its own, when compared altogether, they will give you invaluable insight on how well your display campaign is performing.
This post originally appeared on eZanga.com.