If your small business has a website, you’re probably already paying someone to do your digital marketing. However, digital marketing is vast and covers many things, with innovations happening daily. As with most business activities, it is important to measure the success of any digital marketing efforts you take on. For some, this comes easy but for others it can be a little harder and overwhelming. In a series of blog posts, I’ll explain the most commonly confused metrics to help you decide whether or not they’ll work toward achieving your business goals.
Basic Definition: The total number of times your ads show. This might be as images on the side or top of a website if you pay for display advertising, or as paid search results using AdWords.
Does It Matter: If your business goal is brand awareness, you’ll want your ads to show up for potential customers as many times and places as possible. Think of it as passing out flyers downtown. The to ask yourself is what you will gain from your ad showing more. Are your ads frequent and pervasive enough to be memorable? How will this brand awareness affect your revenue? Although you are paying for a large number of impressions, viewers may not be clicking or taking action based on your ads.
The form of advertising used may also determine the number of impressions your ads will get. If your advertising plan is “pay-per-click,” your daily/monthly budget may be reached with fewer impressions if you have a high clickthrough rate, but have the same effect on your ROI than if it took more impressions to get the same clicks.
Here’s an example:
Imagine your monthly PPC is $1,000. Each of your clicks costs $1, so you can afford 1,000 clicks per month.
In March, 5 out of every 100 people that saw your ad and clicked on it. This means that you totalled 20,000 impressions.
In April, you improved your ad and now 20 out of 100 people click on it. Your total number of impressions for this month was “only” 5,000.
Even though your number of impressions dropped by 75% (20,000 to 5,000) in the span of one month, the net result to your business is the exact same, because it resulted in the same number of clicks.
Depending on your objectives there can be an issue of having too few impressions. You might expect that your ads will be clicked on X many times producing X amount of revenue, but if they don’t show to enough people, this will take longer than expected.
Let’s say you operate in a niche industry, selling only green Mickey Mouse watches in Cincinnati, Ohio. Imagine that you’ve hired an AdWords manager to bring clicks to your e-commerce website. It’s likely that very few people in Cincinnati are searching Google for green Mickey Mouse watches, so your ads will likely not show very often. Since people won’t see your ad there will be very low amount of clicks.
Many advertising services offer pay-per-impression plans (PPM), and it’s important to know that it’s quite possible that your expenses are being measured using a “metric” that is not directly related to your revenue stream. In other words, your expenses are being measured based on the first step in the purchase process (awareness), and not allowing you to properly gage how they relate to the last step of the process (buying decision).
Keep an eye out for more posts around the key digital marketing metrics your business needs to know and measure.