Research of the Week filters through hundreds of research studies and finds the most interesting and thought-provoking research for marketing professionals. Then we provide practical strategies and tips on how to apply the research to influence your marketing programs. Enjoy!
This week’s research looks at the most effective tactics for a programmatic advertising program.
The research study, The State of Programmatic Advertising, was a joint venture with Ascend2, a leading research company. The study was fielded in May 2020 and represents the opinions of 213 marketing professionals from businesses with up to 500 employees. Measuring the impact of advertising campaigns is critical to optimizing a programmatic strategy. Return on Investing (ROI) and Return of Ad Spend (ROAS) is the most meaningful metrics for tracking success according to 58% and 36% of those marketers working with businesses with up to 500 employees.
QUICK TIP from the research: What is the difference between ROI and ROAS? ROAS is a subset of ROI and tells you if an ad campaign is working. ROI tells you if your entire program or department is profitable. Here is a video that provides more detail on the differences between ROI and ROAS.
Definitions of 7 Key Programmatic Metrics
Click-Through Conversion (CTC)
CTC is when a visitor is shown your ad, they click on it, and then convert. The calculation as a percentage is (number of clicks that have converted/total number of clicks your ad received).
Click-Through Rate (CTR)
CTR is a metric that measures the number of clicks your ad(s) receive per number of impressions. The calculation is (clicks/impressions).
Cost Per Click (CPC)
CPC is calculated by taking the total money spent divided by the number of clicks received for a campaign.
Cost-Per-Thousand Impressions (CPM)
Also called cost per mille, is the price of 1,000 advertising impressions on one webpage. The calculation is (cost to the advertiser/number of impressions) x 1000.
Return on Investment (ROI)
ROI is a ratio between net profit and cost. ROI is used to evaluate the overall effectiveness of your advertising program. The calculation is (net profit/cost)
Return of Ad Spend (ROAS)
ROAS is a measurement of how many dollars you will receive for every dollar you spend on an advertising campaign. ROAS will tell you if an ad is working or not. The calculation is (revenue/cost)
View-Through Conversion (VTC)
VTC is when a visitor is shown your ad, they do not click on it, but later return to your site and convert. The calculation as a percentage is (number of VTC/total number of impressions).
SharpSpring Ads is set-up to help you collect the data and metrics to make better decisions. If you want to discuss the key metrics for your program, the SharpSpring Ads team is available to meet with you. Click here to schedule a meeting.