What is of greater importance in contextual advertising: CTR, CPA, or ROI?

Internet marketing specialists quite often face the following question in AdWords campaign management while developing PPC strategy – “What metrics to choose for intelligent evaluation of the effectiveness of contextual advertising”.

There are different opinions regarding this matter and the most popular are the following:

  • Traffic;
  • Page CTR;
  • Cost per click (CPC);
  • Conversion rate;
  • Cost per action (CPA);
  • Return on investment (ROI advertising).

Let’s try to find out which of these metrics is the right one to choose for tracking and ads campaign optimization.

Got tired of low conversions?

Our certificated experts know how to optimise your Google AdWords campaigns so that conversions increase by 35%

By clicking this button you agree to our terms & conditions

By all means, all the metrics listed above are important. But we need to understand that to achieve the best results for all of them at the same time is impossible. Therefore, you need to choose and focus on one or two, maximum three the primary ones and optimize your advertising campaigns in accordance with them. But which of the metrics to choose? What to start with?

It is necessary to follow the following PPC tips to take the right decision:

First of all, make sure you are able to measure all of these metrics and not just measure the average indicators for contextual advertising in general but by separate campaigns, ads, and keywords for any period of time. Why to measure the efficiency in detail? It is necessary to measure the metrics in details in order to be able to adjust the budgets between efficient and inefficient campaigns.

Secondly, ask yourself at what stage of the life cycle your business is on the Internet. See below the graphical representation of business life cycle stages. Let’s explore each of them in more details.

“Market access and explosive market growth” stage. As a rule, this stage is characterized by simple strategic goal, which is to capture the market share and bring a new product to the market. Therefore, it becomes essential for an advertiser to deliver information about a new product to the maximum number of prospective customers at the lowest cost.  Very often there is no target to directly return the investments in advertising at that stage. As a consequence, the best performance indicators to track are the amount of traffic to the site and cost per click. Moreover, the balance between these two indicators is formulated as follows: “To get the maximum number of targeted clicks at a price that doesn’t exceed defined level”.

“Smooth growth” stage. Usually this period is characterized by the following strategic goal – to pay off the resources invested in advertising during the smooth growth. In this case there is no target to come in contact with potential customer, but what is important, it’s the cost of a real customer, which should not exceed the sales revenue. At this stage the primary are sales volume and CPA. The balance between these two indicators is formulated as follows: “To get the maximum number of sales and the CPA that doesn’t exceed defined level”.

“Stabilization” stage. This period is characterized by a decrease in growth and its transition into the smooth stage. At this stage an advertiser’s goal is to maximize profitability and cost-effectiveness. Thus, the primary efficiency metrics are ROI (Return on Investment) and profit. These two indicators may be not associated with each other and so you are able to optimize your advertising campaign only for one of them.

Below is the table summing up all the above written:

So, to summarize we may say: the choice of key performance metrics always depends on the marketing strategy and the life cycle of the company on the Internet. It is not worth optimizing your advertising campaign for all of them at once. If you try to optimize the campaign, so that to be able to measure all the key performance indicators simultaneously, than most likely you won’t be able to achieve the maximum results for any of them. However, one should keep in mind that if one of the indicators is not used for optimization due to certain reason, still it must be measured, just in case you decide to change the strategy when you come from one life cycle stage to another.

via

 

 

Leave a Reply

avatar
  Subscribe  
Notify of

Recent posts

9 Google Analytics Reports that Drive Ecommerce Marketing Decisions and Sales

August 21, 2019

You likely understand the importance of ecommerce analysis to businesses, through tracking sales, web visitor behaviour, and campaign results. In fact, Google Analytics (GA) is used by 59.48% of the top 10k websites and, overall, the number of websites using GA exceeds 14 million.  However, the amount of data on GA is overwhelming. The number Continue reading >

Six Answers to Common Questions About Paid Advertising

July 22, 2019

Some advertising-related questions might seem obvious to marketing experts, but not to business owners trying to figure out how digital advertising works. In this post, Daria Gorbenko, a PPC advertising expert at Promodo, breaks down typical questions clients often ask so that clients and their contractors can cooperate better. Questions are the best way to Continue reading >

SWOT Analysis For Online Clothing Store: Test

July 10, 2019

SWOT analysis is a strategy tool for assessing a company’s resources and capabilities and external marketing situation. Basically, the term is an acronym of the brand’s Strengths, Weaknesses, Opportunities, and Threats. This technique is widely used by marketing managers around the Globe, no matter what field they work in. However, the fashion industry, like others, Continue reading >

How to analyse the shopping behaviour on your website: 5 easy steps

June 21, 2019

Sometimes, ecommerce business owners give shopping behaviour analysis a miss, examining only separate indicators such as conversion rate or bounce rate. However, being aware of how your customers transfer between each stage of your purchase funnel may help you provide prudent solutions, improve user experience, and increase website performance at no additional cost. We should Continue reading >

Let's get the ball rolling

Please fill in this short form and we will be in touch with you soon

For any questions [email protected]

UK | USA

+44 (0) 20 313 766 81
+44 7852 537715

Lincoln
The Terrace AT5,
Grantham Street,
LN2 1BD

+1 347 809 34 86

Las Vegas
7848 W. Sahara Ave.
NV 89117

State Of Ecommerce 2018 (Poland)

TOP 50 Market Players & Their Traffic Analysis

enter correct name, please
enter correct e-mail, please
PPC

What is of greater importance in contextual advertising: CTR, CPA, or ROI?

0
start now

Start now