This week we continue to explore the essential user acquisition metrics for tracking to attain your marketing objectives. While performance marketing might appear intricate, it has the potential to deliver impressive outcomes. Achieving success necessitates comprehending user involvement and employing analytical reasoning to stimulate expansion and curtail expenses. Mastery of vital user acquisition metrics enhances fund allocation, boosts campaign results, and optimizes ad expenditure returns.
Gain an understanding of quantifying metrics like return on ad spend, and others.
Return on Ad Spend
ROAS gauges ad spending versus revenue generated by a specific campaign. This is different from return on investment, which measures the overall profit generated by an entire project. Typically abbreviated to ROAS, this metric helps marketers determine whether their ad dollars directly lead to revenue generation. Where acquisition KPIs like cost per acquisition measure how effective advertising brings in users, ROAS determines how effective it is at bringing in money.
How to calculate ROAS: Return on ad spend is calculated by dividing the total revenue generated as the result of a finite ad spend by the total cost of that ad spend.
Return on Ad Spend = Revenue Generated by Ads / Cost of Ads
Click-through rate measures how many times people are clicking on (or otherwise engaging with) the ads you’re paying for. It’s measured as a percentage of the total ad impressions (when your ad is displayed to a potential customer) that result in the customer clicking on the ad.
Also known as: CTR
Why you need to know it: CTR is a helpful metric for determining how engaging your ads are. If users aren’t clicking on the ads you’re paying for, it may be time to reevaluate your approach and continue testing and optimization. CTR can vary wildly, depending on where you’re advertising or the keywords you’re targeting. A low CTR isn’t bad if it leads to valuable conversions, while a high CTR without conversions wastes money.
How to calculate it: You can calculate your click-through rate with the following formula:
Click-Through Rate = Total Number of Clicks / Total Ad Impressions
Conversion rate is similar to click-through rate, though it takes measurement one step further. Rather than merely determining the percentage of users who clicked on an ad, conversion rate measures the percentage of users who actually take action once the ad is clicked. Your conversion rate tells you the effectiveness of the sum of your campaign decisions — targeting, creative quality, and even your app’s onboarding experience — in mathematical terms. If you’re spending money on ads that aren’t leading to conversions, you need to examine where the disconnect is happening.
How to calculate conversion rate: You can calculate your conversion rate by dividing your total number of conversions by the total number of clicks.
Conversion Rate = Total Number of Conversions / Total Number of Clicks
Alpha Media Can Help Your Business Grow
Television has been a crucial marketing channel for building brand awareness, but it hasn’t been a primary resource for user acquisition — until now. CTV offers the ability to reach your target audience when they’re most attentive and provides you with the tools to optimize your ad spend through incremental testing, retargeting capabilities, and multi-touch attribution, all with high-quality, brand-safe inventory. Want to discover how adding CTV to your media mix can boost your user acquisition efforts? Alpha Media can help. Contact us for a conversation with a Digital Consultant.
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