How to Chart Your Course in Traditional & Digital Media
In all media campaigns, having a guiding beacon is paramount. Without this cardinal signal steering your media endeavors safely to port, your advertising investments would resemble little more than a blindfolded leap into the unknown. Luckily, us media buyers possess a tool vital to the success of every client: key performance indicators (KPIs). These performance indicators are the compass points that meticulously chart the inception and progress of each media campaign, serving as our North Star to evaluate the performance of our clients’ media investments. KPIs help us know when things are going well or when it’s time for a strategic pivot. Prior to embarking on any advertising journey, it is incumbent upon all advertisers to firmly establish their KPIs and to hold true to them when their campaigns are under full sail. Today, we embark on an exploration into the realm of KPIs, shedding light on their significance in both digital and traditional mediums.
KPIs in Traditional Media
In the realm of traditional media, the KPIs typically utilized by advertisers distinctly mirror the essence of these platforms, emphasizing brand building over extended periods rather than immediate, tangible outcomes.
o In every traditional media campaign, media buyers and planners proceed through an intricate journey of negotiations and contractual agreements. At the end of this odyssey lies the promised land of expected delivery. Consequently, an inherently vital KPI in the traditional media landscape is "delivery." The metrics for tracking this vary depending on the medium. For instance, in television and radio, the gold standard is typically either Gross Rating Points (GRPs) or impressions. Print media gauges delivery through circulation numbers and readership, while out-of-home media vehicles rely on impressions. Regardless of the traditional medium in use, this crucial KPI revolves around measuring delivery against the predetermined goals established during the planning phase.
o Similarly, some media campaigns set their sights on specific reach and frequency objectives; Reach – the approximate percentage of your target audience that is exposed to your message, and Frequency – the average number of exposures to that message. For example, advertisers might have discerned that their target audience needs to be exposed to their message, on average, four times to catalyze the desired actions, AKA a 4 frequency. Hence, tracking not just overall delivery but delving further into reach and frequency becomes an invaluable KPI for traditional advertisers.
o Another KPI akin to pure delivery is assessing the delivery against a particular target audience or sub-audience within a campaign. Advertisers often define primary, secondary, and even tertiary audiences, meticulously aligning their message with the diverse segments of their target demographic. This KPI serves as a litmus test to determine whether media campaigns are effectively reaching specific segments of the intended target audience, ensuring the message resonates as intended.
o For traditional media buyers, there's an intriguing and often under-appreciated KPI known as "added value." This metric serves as a measure of effectiveness and the artistry of the media buyer. Did the media buying team manage to secure additional media placements at no added cost? Were they able to exceed their planned impressions through masterful negotiation skills? While not a guarantee in every campaign, added value serves as an opportunity for media buyers to show their stuff and test their mettle through strategic negotiations.
KPIs in Digital Media
While there are instances where digital media campaigns share similarities with traditional media KPIs, especially in brand awareness endeavors, the digital sphere largely embraces a set of KPIs that offer more immediate, tangible insights. Digital media KPIs are inherently designed to allow advertisers to gauge the impact of different campaign elements in the short term, empowering them to adapt and optimize campaigns on the fly. Moreover, they provide overarching indicators to assess the overall efficiency and effectiveness of campaigns from a business standpoint.
Click-through rate (CTR)
o In the digital landscape, the click-through rate (CTR) stands as a fundamental KPI. Particularly prominent in pay-per-click (PPC) campaigns, CTR serves as the barometer of an ad's efficacy in enticing users to click through to a landing page. Ads with low CTRs often signal a need for improved ad copy or more precise targeting. Conversely, ads boasting high CTRs indicate that the audience is positively responding to the messaging. CTR is a straightforward yet indispensable KPI in the digital realm.
Conversion Rate (CVR)
o Moving beyond CTR, the conversion rate plays a pivotal role in evaluating the effectiveness of ad campaigns and landing pages. It is important to note that this assessment encompasses the landing page experience, as ads alone may not suffice to secure conversions. You can lead a horse to water, but you can’t make it drink. While digital ads can lead users to a landing page, it is the quality of that page that ultimately facilitates conversions. The conversion rate is a KPI that reveals whether adjustments are needed in the ad content, landing pages, or potentially even product positioning and pricing.
Cost Per Acquisition (CPA)
o Efficiency is the lifeline of conversion-driven digital campaigns, and this is where the Cost per Acquisition (CPA) KPI enters the stage. Successful marketing campaigns must generate conversions at a sustainable and cost-effective rate. CPA allows advertisers to meticulously track the cost-efficiency of conversions, granting them the ability to pivot or fine-tune their strategies based on these CPA insights.
Return on Ad Spend (ROAS)
o Return on Ad Spend (ROAS) closely resembles the traditional Return on Investment (ROI) metric within marketing but factors in the conversion value achieved in relation to the ad spend. ROAS serves as a critical KPI for digital advertisers, particularly those in the e-commerce realm. A digital campaign that generates $3,000 in revenue with a $1,000 ad spend would yield a ROAS of 3.0. What constitutes a "good" ROAS can be context-specific, dependent on individual advertisers, considering unique profit margins, cost structures, and other variables. This illustrates why the establishment of personalized KPIs is paramount, as benchmarks can vary significantly from one advertiser to another and one campaign to another.
Chart Your Course
These are just some of the common KPIs in both traditional and digital media spheres. The specific KPIs may vary in complexity depending on the scenario, but one universal truth remains: the establishment of Key Performance Indicators is a non-negotiable precursor to any campaign launch. KPIs serve as your unwavering guiding light, steering the ship of your advertising endeavors through the vast sea of media. If you’re eager to see how The Ward Group can help captain you through this sea, contact us today!