In order to fully understand and decode your campaign’s digital advertising reports, you need to have a working knowledge of the most common metrics you’ll encounter. When you gain appreciation for the terminology, you’ll be able to look for the metrics that matter and disregard those that don’t.
Here we breakdown some of the most common digital advertising metrics and how they relate to your campaign’s strategy.
In digital advertising, an impression occurs when an ad is served by the advertising software. Critically, this does not mean that an individual saw the ad. It may have been loaded onto a page but the user didn’t scroll all the way down, for example. Worse, impressions are subject to ad fraud where bad actors use bots to capture ad revenue. Reputable ad networks take steps to prevent this sort of fraud.
In your reports, impressions will typically be the largest number you see. It’s an important metric when your objectives are awareness and persuasion. If the ad you’re showing is effective and it’s targeted correctly, the more people who see it, the better.
Cost per thousand (CPM)
Many digital ads are priced on a cost per thousand or CPM (from the Latin mille meaning 1,000) basis. Context is extremely important to evaluate CPM. Display or social ads may be priced as low as $7 CPM but streaming ads or email list rentals can be $30 CPM or more. Avoid trying to make apples to apples comparisons on price because quality and scarcity are key factors.
Facebook includes an engagement metric in its advertising reports, which refers to a user liking, commenting, or sharing a post. If your ad has a lot of impressions but relatively low engagement, that could be a sign that your ad is not reaching the right audience or you need to revisit the content.
Google includes a Quality Score for search ads that indicates how relevant the ad and the targeted keywords are for users. A higher Quality Score is better because it means your ads are helping searchers find the information they want. Ads with a lower Quality Score will still run but they may not get as many clicks and you’ll likely spend more budget.
Return on Ad Spending (ROAS)
Return on Ad Spending (ROAS, pronounced “row as”) is the monetary value generated by your campaign’s spending on ads. For example, if you spend $100 on Facebook and raise $50 in direct donations, your ROAS is 50%. Similarly, if you value a new email sign up at $2 each and get 100 new emails from $100 spend, your ROAS is 200%.
Note that ROAS is different from return on investment (ROI) because ROI is a more comprehensive measure of your digital efforts, not just advertising.
As the name suggests, a click is measured any time a user clicks on your ad. This is an important metric to track if your advertising objective is direct response like email capture or page views. Otherwise, if there’s no call to action in your ad, like with a persuasion or awareness campaign, it’s not a metric you should optimize for.
Click Through Rate
The click through rate (CTR) for an ad is calculated by dividing the number of clicks on an ad by the number of impressions. Again, context is critical for determining whether a CTR is “good” or “bad.” For display ads, lower CTRs are common, but for a Google Search ad you want a much higher CTR.
If direct response is the objective of your ad campaign, measuring how many results you generate is essential. A conversion occurs when a user completes a desired action such as donating, RSVPing, or providing an email address. Some ad networks, like Facebook or Google, allow you to optimize your campaign for conversions – targeting a specific cost per conversion – when you set up conversion tracking.
When running a video ad campaign, a view usually means the ad started to play, but the metric can vary depending on the platform so it’s always good to get clarification. A view count does not guarantee that a user saw or even heard the ad.
Similarly, whether a target saw the ad for just 5 seconds or watched all 30 seconds matters a great deal when your objective is persuasion.
Views to Completion
To help improve this, some platforms will offer a view to completion metric that details how many (usually a percentage) of ads served were viewed to their entire length. This doesn’t apply to forced-view ads like pre-roll or mid-roll.
Reach is a metric most often encountered on social media platforms like Facebook and it indicates how many unique users encountered your ad. This can be a particularly helpful measure for determining your ad’s penetration within a given audience. If the number of impressions or views is five times higher than the reach, then you know it’s cutting through.
Digital campaigning can easily be obscured with jargon – especially when advertising metrics are involved – so don’t hesitate to ask your vendor to explain what a data point really means for your campaign.