How to measure the ROI of your website ads
While measuring ROI is critical to understanding the success of your campaign, so too is optimising your ads. It is essential you monitor the performance of your ads, and adjust to receive the best ROI.

When using website ads (also known as display advertising) to grow your business, there are no shortcuts to getting a return on your investment. But understanding how to measure success will quickly help you determine whether or not you are making the most of your budget spend.

Before you begin a campaign there are three key things you must do to:

  1. Determine what you’re trying to achieve for your business – is it more website traffic, more clicks to a direct page on your website, or more direct leads?
  2. Set a defined period for gathering results – are you measuring your results over weeks or months?
  3. Set a base level for comparison – you can set yourself some advertising benchmarks compared to others within your industry with businesses like yours. Start by finding display metrics and benchmarks – sources like HubSpot and ADMA can prove useful.

 


Measuring your ROI

Once you’ve defined your fundamental goals, you can measure how well your advertising performs against those goals.

 

Cost per thousand campaign

The likelihood is you started your ad campaign by purchasing a certain number of ad impressions, or views. These are usually charged by cost per thousand ad impressions (CPM). If your campaign costs $1,000 for 100,000 impressions, for example, you have a CPM of $10.

To measure the success of your CPM campaign you should be looking at the click-through rate (CTR) for your ad, which measures the percentage of clicks you got from your ad. Keep in mind the average CTR for a display ad is 0.35%.

 

Cost per click

Another option is to pay per click to your website – measured through cost per click (CPC). Purchasing by CPC allows you to easily measure the success of a ‘click’ campaign, as you can clearly define your success measures from the beginning.

However, it’s often hard to measure just how much value to attribute to a click before a campaign kicks off. If you are looking for clicks, CPC is measurable regardless of whether or not you are paying per click. It’s a valuable statistic to track to ensure you are getting the amount of traffic you hoped to get from your campaign. Ensure your desired web link (or your click) is tracked so you can monitor the performance using your own systems. The average CPC is 0.58 cents.

 

Cost per acquisition

You may be looking for a more solid lead than a click. You may want to convert someone into a customer – don’t we all?

Some websites make it possible for you to advertise under a cost-per-acquisition model (CPA). This means you pay a fee for each customer you receive. This kind of advertising usually directs customers to a gated offer, where they will need to submit their details in order to access the offer.

It is absolutely critical that you can track these conversions in order to measure the success of the campaign – you are bound by your chosen publisher as much as you are to your own measures of success. The expected cost per lead for a CPA campaign varies greatly, but $100 is a common middle ground.

 

Increased traffic

It’s worthwhile monitoring your site’s traffic during a campaign period. Is the traffic going up or is it stagnant? Remember, not everyone is going to click on your campaign. That doesn't necessarily mean they are failing to engage in your brand.

Measuring whether advertising has attributed to traffic outside of the advertising measurements is not an exact science. However, applying some basic logic can help you come up with a broad conclusion. Consider:

  • Excluding any traffic received from viral content
  • Measuring based on the dates the campaign was live
  • Comparing only direct traffic sources (excluding social, newsletters, etc.)
  • Removing any traffic attributed to clicks from the advertising campaign
  • Only using this as a reporting method where no other significant campaign was active at the same time

While measuring ROI is critical to understanding the success of your campaign, so too is optimising your ads. It is essential you monitor the performance of your ads, and adjust delivery times and/or messages accordingly. This will ensure you receive the best ROI possible. 

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