Determining the performance of your online ad is crucial to understanding its effectiveness and making informed decisions for your advertising strategy. A good performing ad starts with being an ad that is shown and that people interact with. What happens after that mainly depends on the quality of what follows, like the quality of your websites, the information you provide, your pricing and offers if you sell products, the user experience like the check-out process and the payment methods you offer. If your ad manages to attract people to your website, but they don't convert to, for example sales, it could be that you are not targeting the right people, but you may also need to have a harder look at the entire process your users go through. A good ad is just the beginning.
Here are some key indicators to assess the performance of your online ad:
Impressions: The impressions tell you how often your ad has been displayed or "put in front of eyeballs". Different platforms may have different terminology, but this number tells you if the platform was successful at showing your ad according to the targeting and budget that you chose. Impressions by themselves may not tell you much about the performance of your ad, but can still be important for brand awareness, even if you do not see interactions with your ad. Remember the rule of 7 from our previouspost?!
Click-Through Rate (CTR): The CTR measures the percentage of people who clicked on your ad after seeing it. A higher CTR indicates that your ad is compelling and relevant to your target audience. It signifies that your ad is generating interest and attracting users to take action. This does not yet mean, that you will for example sell your products or services, as you have to factor in the quality of your website, your pricing, check-out experience and payment methods that your offer.
Engagement Metrics: Depending on the platform and ad format, engagement metrics such as likes, comments, shares, or video views can provide insights into the level of user engagement with your ad. Higher engagement signifies that your ad is resonating with your audience and creating a positive impact.
As your skills and knowledge evolve, you can start looking at more advanced metrics like:
Conversion Rate: The conversion rate measures the percentage of users who completed a desired action after clicking on your ad. This action could be making a purchase, filling out a form, subscribing to a newsletter, or any other goal you've set.
Return on Ad Spend (ROAS): ROAS evaluates the financial performance of your ad campaign by comparing the revenue generated with the amount spent on advertising.
Cost per Acquisition (CPA): CPA measures the average cost you incur to acquire a customer or lead through your ad campaign.