How To Measure Your Digital Advertising

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When compared to traditional channels of advertising, such as direct mail, billboards, and magazines, the use of digital advertising is relatively new, with the first online advertisement appearing in 1994.

Since then, digital advertising has become a fundamental part of marketing strategy, allowing marketers to become more focused and strategic.

A laptop with Facebook ads on the screen
Digital advertising has become a huge part of marketing strategy.

It can be a challenge to know how effective your digital advertising is as a business. Methods of measuring your digital advertising include, but are not limited to:

  1. Last click GA
  2. Tech platforms
  3. CAC management 
  4. X % of revenue
  5. Customer reported  

1. Last Click GA

Google uses various attribution models, one of which is last click, which can be used to measure the effectiveness of a business’ digital advertising efforts.

In short, last click attribution works to measure which touch point a customer clicked before they made a purchase, giving it all the credit for the sale. It’s highly popular and free on Google, with 41% of marketers using the last click attribution model.

An example of how last click attribution works would be: Someone interested in purchasing a product uses Google search to find what they’re looking for. Search results for the products appear, along with an ad from your site that reads “save up to 50%” on that specific product. They click, and then buy that product.

During this process, the last click attribution model will measure the final click and attribute that to the conversion. In this instance, Google Pay-Per-Click Ads would get the credit for the sale.

Attributing the click to the sale is useful from a marketing perspective. However, it can be somewhat reductive in that it only gives you a small view into what the customer is engaging with and also doesn’t take into account the journey that the customer goes on to make that purchase.

That said, when used in conjunction with other methods, it can be an effective way to measure your digital advertising efforts. 

2. Tech Platforms 

Tech platforms can also help you to determine the effectiveness of your digital advertising efforts.

Platforms such as WordStream and Fospha Marketing provide businesses with useful insights and tools to help you to manage your digital advertising campaigns and capitalise off sophisticated algorithms.

WordStream in particular is a helpful platform for managing your Google ads with their Google Ads Performance Grader, allowing you to establish what ads are performing well and which need improvement. 

This tool gives you a transparent grade and a detailed report on various aspects of your Google ads, such as click-through rate, in turn eliminating guesswork and allowing you to gain a precise idea on how your ads are really performing.

In addition, these tech platforms also provide you with analytics on social media, enabling you to test new social media channels, such as TikTok. As an app with over 1 billion monthly active users worldwide, the range of TikTok is well worth taking into consideration when planning ad campaigns, and testing out new channels can also help you to scale up as you gain a better understanding of your target audience.

As a method for measuring your digital advertising effectiveness, it can be very useful to invest in tech platforms.

Two people with laptops, sat at a desk strategizing
There are various methods to measure the effectiveness of your digital advertising, with many businesses choosing to use multiple simultaneously.

3. CAC Management 

In short, CAC, also known as Customer Acquisition Cost, is the amount that a business spends on acquiring a customer, and is an incredibly important metric of digital marketing.

CAC management works as a way of measuring your digital advertising effectiveness. While acquiring new customers is important for the growth of your business, it can also be expensive when compared to retaining existing customers. 

In fact, studies have shown that retaining existing customers is 5 times cheaper than acquiring new customers. This comes down to the probability of making a sale, which when you’re selling to an existing customer is as high as 60-70%. 

However, the probability of selling a product reduces significantly to only 5-20% when it’s a new customer, therefore making it much more difficult to sell.

By managing CAC and keeping it at a desired target, and by placing an emphasis on retaining existing customers, you can gain a better idea of the effectiveness of your digital advertising.  

4. X % Of Revenue 

Keeping your media investment at X % of revenue can also help give you a bigger picture of how well your digital advertising is going.

Not only is this incredibly easy to implement, but it’s also essential to manage your overheads in regards to media.  

As revenue, and therefore profit can rise and fall, keeping this number consistent can prevent you from overspending on media. 

This is especially important for smaller sized businesses that are trying to scale up, as this percentage will remain in line with your revenue even during uncertain times.

In short, if your spend is always a set % of revenue, then you aren’t in danger of overspending on media. 

5. Customer Reported

Customer reports are important for setting and meeting customer expectations. Ensuring you’re meeting existing customer expectations is especially important, as we’ve already covered the cost implications of not prioritising customer retention.

Customer surveys offer quality data from people that have used your site and that have a non-biased perspective, establishing if there’s anything that you could improve to promote a higher level of customer satisfaction.

Using post-checkout customer surveys that have an incentive is a great way to guide your business, and to discover what is working and what isn’t according to the consumer. Adding a financial incentive, such as a voucher for their next purchase, will encourage more customers to fill in the survey in question.

In these surveys, you should include questions such as how easy the website was to navigate and find what they were looking for, or how easy it was for them to pay.

This is essential data to collect to determine how easy your site is to use. Provided that you use this information alongside statistical validation, it can be a very useful way of measuring the effectiveness of your digital advertising efforts.  

We are Velocity Juice: we help digital-first companies scale faster by offering flexible eCommerce startup and scale up funding with no equity dilution. For more information about what we do, check out our insights blog or get in touch to speak to a friendly member of our team. 

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