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How to Measure Ad Effectiveness
4 Plays9 months ago
This conversation delves into the critical question of how to determine if advertising efforts are effective. It explores the challenges of attribution in marketing, especially in a post-pandemic landscape, and emphasizes the importance of measuring conversion metrics. The discussion provides actionable insights on analyzing ad performance indicators, including click-through rates, cost per click, and creative effectiveness, ultimately framing ads as amplifiers of business success or failure. Takeaways
- If you're overseeing marketing, knowing if ads work is crucial.
- Attribution in advertising has become increasingly complex.
- Testing and measuring ads requires looking for specific indicators.
- Start by working backwards from the desired outcome.
- Measuring conversions optimized for leads is essential.
- Click-through rates indicate ad relevance and audience targeting.
- Creative quality is vital in a competitive advertising landscape.
- Cost per click should be within a reasonable range.
- Ad placements can significantly affect performance metrics.
- Ads amplify the success or failure of your business offerings.
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Transcript
Overview of the Anya Mike Podcast
00:00:03
Speaker
Welcome to the Anya Mike podcast, a podcast where we discuss the ins and outs of marketing, running a business and tips and tricks the industry may just not be telling you, but we will.
00:00:14
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If you're looking for inspiration on exactly how to grow your business with ambition, innovation and confidence while creating maximum impact to influence your clients like never before, you're in the right place.
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Grab your AirPods, pen, paper, or laptop, and let's get on your mic.
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Get set and grow.
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And now, here's your host on the mic, CEO Ashley Monk.
Key Question: Evaluating Advertisement Effectiveness
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All right, everyone, we are talking today about a really important question that some of you maybe have always wondered, but deep down it's one that we are maybe afraid to ask.
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How do you know if your ads are actually working?
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Like, are they working?
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Maybe you're a VP that's overseeing marketing and you're trying to measure and make sure that you know enough to manage.
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Maybe you own a company or you're the head of an organization and you're trying to see, are we investing money in the right places?
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Maybe you're a marketing director that's managing a vendor, whatever it is, maybe you're a media buyer too.
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And you're wondering, okay, what, with everything that has changed in this industry, what is working?
Challenges in Attribution
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So we are going to talk about that because if we are being honest, ever since probably the last few years, attribution has become more challenging.
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There are certain platforms that
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and places that we can invest to get better attribution.
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But even when you're spending money on software, you are investing in UTMs.
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If your organization works in silos, you've got a lot of people in and out of your CRM, whatever you're using, it can be really hard to decide, hey, are they working or not?
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Especially, especially if you have a long sales cycle.
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So I know take colleges and universities, for instance, it's really hard if you're going after a traditional undergrad student, that's deciding once a year that they are going to attend your institution.
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It's hard to measure that because you're comparing year after year data.
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And so what we need to look at is, okay, how do we actually test that?
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Because there are clues and there are a lot of indicators that we can look at.
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So I'm going to break down where are the places that we can look and where are maybe some of those bottlenecks to where we can get indicators, um,
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So whether our ads are working so easiest place to start is to work backwards.
Conversion-Focused Marketing Approach
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So in most campaigns, the way I know that we approach advertising and running ads is very conversion focused.
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Our goal and our outcome here at Anya is to help grow business outcomes.
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And the way we do that for the organization is by tracing the end result in working backwards.
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So if that's an institution, we focus on enrollment for the most part because we know enrollment drives revenue.
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If that is a hospital or a medical center, that is usually focused on patients.
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If it's a pharmacy, it's trying to get repeat customers in.
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If it is manufacturing, it's more leads, so on and so forth.
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So usually when we're partnering with someone, we're looking at what is the result?
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Like what is the end game here?
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And then we need to work backwards to figure out what the funnel is going to be and what are markers along the way.
Metrics for Ad Evaluation
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So the easiest place to check if our ads are working is, are we measuring a conversion that's optimized for a lead?
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So a lead being quantified as a name, an email, a phone number, maybe a contact form, maybe for an institution, it's an RFI.
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Now for healthcare, it's a little bit harder because it's hard to track patients.
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Maybe it is foot traffic or visits to a site because of course that there's a whole different, maybe I need to record an episode on this for healthcare because it's very different.
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But that's the easiest place to start, right?
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Is what does that lead?
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Are we for our institutions?
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Are we seeing RFI forms come through?
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Are we getting the leads and numbers that are aligned with what our benchmark should be for our industry?
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That's step one.
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That's one of the harder things to track though, because if you are optimizing, let's say for sales or for like to try to see your cost per acquisition, that data is going to take a long time to be able to attribute at least six to 12 months.
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So usually quantifying a lead is the easiest place to start.
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From there, let's say you're not tracking for leads or you're not measuring that.
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We might want to look then at the click through rate.
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So what you're going to notice in this episode is that I'm essentially working backwards toward every component of the ad to see.
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And this is going to be regardless of channel.
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This applies on Google.
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This applies on programmatic.
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This applies on social, whether it's TikTok meta, we're working backwards through the funnel to make sure that
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we are really measuring the right thing.
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So, um, next is going to be some of those soft stats.
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So the click through rate, the link click through rate specifically, are people engaging with your ads?
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Because if they are not, um, usually that number needs to be between probably above 1%.
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If they're not, that means one of two things, your ad creative, whether it's your copywriting, your hooks, that it is not relevant or
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Or you are showing the creative to the wrong audience.
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Your targeting is wrong.
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Now I will tell you in 2025, it used to be a very easy targeting game.
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There was low saturation in ads, but here we are, um, in a post pandemic world where advertising is so competitive.
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And if your ads are not compelling, you will not stand out.
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Therefore I would put creative ahead of
Importance of Creative Content
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targeting.
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You want your creative
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to stop the scroll, to capture people.
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You want it to be in, I've heard it said the thumb zone to where people can see it, where they're scrolling on their phones because 99% of traffic that you're going to get from advertising is going to be mobile.
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So what is that link click through rate and is it on par?
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Next thing you're going to look at too is your cost per click.
00:05:38
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Um, now a lot of times I'll see new media buyers that are placing bids or advertising, get excited when it's like 0.001 cents or that number is really, really low.
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Um, obviously we don't want it to be too high.
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There are channels like on LinkedIn where it is common for that number to be $7 per click.
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Like if you're going after an executive audience, um, that click is, is going to be pretty expensive.
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So that's just something to keep in
Cost-Per-Click and Placement Considerations
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mind.
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But you also don't want it to be too cheap or too low either.
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Usually if it is too cheap or too low, there's going to be some incongruency there.
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You're going after either a cheap audience or a poor placement.
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So if that cost per click is, I would say usually on average, you're looking at like 50 cents to like three or $4.
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That's going to depend on your audience, your location, your bid type and campaign objective.
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I would say if it's out of that range, you, the next place that you're going to want to look is your placements, regardless of channel, where are your ads being served?
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I know for Google specifically, Google display network used to have great placements.
00:06:38
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Now the last couple of years, they are trash.
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No offense.
00:06:41
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Hopefully maybe Google will fix it with AI, but those placements, um, on display network will usually be low traffic sites that are not vetted.
00:06:49
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On Facebook, I see a lot of ads go to the marketplace listing and depending on what you're advertising, that might not be a great spot to be.
00:06:56
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So, and but because of those placements, they're usually not ideal.
00:07:00
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Therefore, they will drive down that cost per click.
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Next place to look if all those things look good is your targeting.
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Who are you going after?
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Has there been a glitch?
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Do you have, I've noticed some platforms have the expanded audience that usually doesn't perform well because it's adding a lot of different people.
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to your audience to serve it.
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You don't want your audience to be too small.
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I see that mistake made often, even in retargeting.
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It needs to be a few thousand people for you to have a shot to really be able to serve and make those ads be effective.
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But you
Engaging Ad Creative
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want to look there too.
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And then finally, finally, if none of those things are working well,
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Is your creative vanilla?
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Like, is it boring?
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Are you just using chat and you can tell that AI wrote your copy?
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Are you just pulling the same Canva template that everyone else is doing the same thing?
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I will say there is value to branded content for sure that matches your organization and reflects it as a whole, but if it's so boring and there's no real hook there, I would say the winner right now is the hooks.
00:07:54
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So, um,
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whatever outcome that you promise.
00:07:58
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That's a differentiator.
00:07:59
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Like I know we actually run a lot of hiring campaigns for roles.
00:08:02
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Like if there's an opportunity to move up within the organization or a signing bonus, uh, what is that for you?
00:08:09
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And can you lead with that in the design and in the headline?
00:08:11
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And remember to, with your creative people are looking from top to bottom and they're scrolling for the first sentence of the copy.
00:08:18
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a couple of like the headline on the image and then like the headline in the ad itself, pending the platform you're on.
00:08:25
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So those are the things that I would look at to see if your ads are working.
00:08:29
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So just to give a quick recap, number one, know the conversion that you're measuring and optimizing for and start there to see if that's in range.
00:08:36
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So you have to set a benchmark to be able to do that.
00:08:38
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The next thing you want to look at, um, your link click through rate is that number in range, your cost per click.
00:08:45
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your placements, your targeting, and your creative.
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Those are the six easy ways to check to see if your ads are actually
Ads as Feedback Mechanisms
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working.
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And at the end of the day too, remember the key here is that if all of those stats are in line and you're blaming ads,
00:09:01
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This could be a larger problem at play because honestly, usually ads, like they're always going to get your result.
00:09:06
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They are an amplifier.
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Ads are an amplifier, just like money's an amplifier.
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Ads are an amplifier of your success or failure.
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If you are successful, they will amplify that.
00:09:15
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If your offer or whatever it is that you are selling is not wanted by the market, ads will amplify and tell you that too.
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So remember, there's no failure when it comes to ads, only feedback and systems to be able to inform those decisions.
00:09:29
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All right.
00:09:30
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I hope that was helpful.
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If you like this topic, give us a shout.
00:09:33
Speaker
We're always looking at how to improve the show and talking about topics that you'd enjoy until we see you next week.
Encouragement to Subscribe and Review
00:09:40
Speaker
Thanks for joining us this week on the Anya Mike podcast.
00:09:43
Speaker
We'd love to hear from you.
00:09:45
Speaker
Make sure to visit our website, anyamark.com, where you can subscribe and never miss a show.
00:09:50
Speaker
While you're at it, if you found value in this episode, be sure to drop us a five-star review on iTunes and share the show with a friend to help us to continue to influence more people to create maximum impact.
00:10:02
Speaker
Tune in for next week's episode, and we'll see you then.