Impressions, Clicks or Conversions?
Picture an athlete who is really happy because their stats are the best in the league, but their team keeps losing. Would you want that kind of player on your team? The same goes for advertising. We can make any single statistic look good, but if it’s not the most important stat then are we really successful?
At PBI Advisors we always first identify the KPI’s before any type of project, and when we’re talking about online advertising, that is usually the number of conversions we generate. But too often we’ll see clients focused on impressions & clicks. And yes, there are plenty of scenarios where both of those measures are the goal (awareness campaigns come to mind first). But if you’re looking at your cost per click and saying it’s down $1 since last year, but your cost per conversion is up $10, then it’s time for an adjustment.
As I mentioned, there are scenarios where you want to maximize clicks & impressions instead of conversions. Here’s a general rule of thumb of when to make each your primary goal.
Impressions – If you’re looking to create brand awareness, impressions is the best way to go. Just like the number of people that drive by a billboard or see an ad at a sporting event, when familiarizing people with your brand, get your content in front of them on a frequent basis. Display & video campaigns are examples of where impressions can pay off.
Clicks – Pay per click is the most common form of online advertising. It’s easy to measure and shows a customer has interest in your business. If you’re playing a numbers game where you know your conversion rates, trying to get as many clicks as possible for the lowest cost is a good way to go. But as you’ll see below, I don’t believe it’s the best.
Conversions – Bottom line, how much does it cost you to get a sale? In the sports example, this is the scoreboard where you determine whether you won or lost. If I have a super low cost per click and millions of impressions, but I’m paying more for a conversion than the sale is worth, then all the other numbers don’t matter.
Identifying Your Target Audience.
Now that we’ve identified our potential KPI’s, let’s talk about how that effects our decisions around targeting. And when we talk about targeting, this could mean a number of different things: location, device, medium, company, demographic, etc.
Let’s start with location because, well, it’s the easiest. If your business is at a physical location, then you should be collecting customer addresses whenever possible. You can then plot those on a map (using Power BI or Google Maps) and get a great idea of where you are most likely to convert future customers. If all of your customers are within a 5 mile radius, why waste advertising budget on areas outside of that? You may get impressions, you may get clicks, but you’re not making money if they don’t make the trip to see you. Targeting locations is one of the fastest ways to optimize your cost per conversion and although it will probably involve a discussion with product owners, selling them that we’re focusing on people more likely to buy, and showing them the data why, should be an easy conversation.
Another popular (and successful) way to narrow your target audience is by demographic. Facebook does a great job of this allowing you to target people who have similar interests as your business, are in a specific age group, gender, have kids and so many more. You can even target those who like your competition’s Facebook page.
Another great forgotten about way to target is by device. Google Ads has the capability for you to bid more or less depending on whether the person is on a desktop, tablet or mobile device. If you’re tracking your web data (and hopefully you are), then you should know which device is most likely to result in a conversion, and maybe more importantly, which one is not. Don’t try to get someone to make a $10,000 purchase or complete a long registration form on their phone. Your money is much better spent in other ways.
Hopefully some of this information will help you with your ad campaigns. Audience targeting is so often overlooked and if you’re analyzing data the correct way, your conversion rate can jump with just a few small changes.