Programmatic Advertising is a significant advertising channel used by e-commerce companies today. It is still one of the most effective digital ad acquisition methods.
With programmatic advertising, brands can strike the ideal balance between outreach and driving interest. It is about advertisements showing shoppers a product and its features, tempting them to decide without appearing overbearing.
According to a recent Programmatic advertising worldwide study by Statista,
Programmatic ads enables marketers and advertisers to target distinct segments of shoppers efficiently. Its linked platforms also enable robust measuring tools for marketing effectiveness.
They drive increased velocity and responsiveness to shifts in audience perception. Brands can measure specific ad metrics using the technology’s real-time feedback loop. This helps to enhance the performance of their digital encounters and ad campaigns.
The following list of key performance indicators (KPIs) for programmatic ads platforms can help marketing agencies optimize their ad spend:
Programmatic Advertising Result Metrics
Clicks, Impressions, and Actions
Three metrics are fundamental to online measurement and mapped to impressions. The user accomplishing a campaign objective apart from clicking, such as arriving at the checkout page, makes a note of it.
Actions are frequently referred to as events, with conversions being the most prevalent type of action. These are merely raw data. Advertisers need far more sophisticated perspectives of their campaigns.
These metrics correspond to two of the most important campaign types: performance and brand.
It’s crucial to examine financial metrics first to obtain many of them.
Financial metrics
Financial metrics shed light on a campaign’s financial aspects. Revenue metrics track money received from advertisers, while cost metrics track money spent on the campaign. To accurately charge the advertiser and ensure the campaign is profitable, we must monitor both metrics.
- Gross Revenue: This is the revenue the campaign must bring in. An advertiser will ask for a specific budget for advertising over a predetermined timeframe with predetermined objectives. The allocated revenue is part of these objectives. Under this metric, if a campaign is working well, brands apply an upweight. It is used to decide if they should add more budget to the campaign.
- Discounts: A range of discounts are available for marketers to use for better engagement with potential customers. Standard customer discount: a fixed, favorable rate usually offered yearly to entice new customers.
- Net Revenue: When the campaign goals are achieved, the customer will be billed for the net revenue, calculated by subtracting any discounts from the gross revenue budget.
- Media Cost: This is just the price of obtaining impressions; it’s the investment into the cost of the paid media.
- Data costs: It is the sum of money given to partners in exchange for the targeting of campaign data. This may involve our own data partnerships and data related to campaign contextual targeting or brand safety.
- Margin: A typical margin model asks what percentage of revenue is taken in as profit. Profit / Net Revenue (Or Net Revenue-Costs/Net Revenue) is a simple formula.
Performance metrics
Performance metrics are centered around direct response (DR) campaigns. Considering that most of our campaigns are DR, we will incorporate metrics frequently used for brand and performance.
- Impressions: The number of times a creative is shown; the fundamental unit of campaign delivery.
- CPM: Cost per mille (Cost per thousand) is the most common way to discuss delivery costs. Costs are per 1000 impressions because individual impressions are usually quite inexpensive.
- Clicks:A click happens when a user taps the creative on a mobile device or clicks it. This is a typical campaign objective for direct response (DR) campaigns since it directs the user to the content the advertiser is attempting to sell.
- CPC: Cost per click is a derived metric of the price paid for every click, similar to CPM. There is no need to use 1/1000ths because clicks are much rarer than impressions; the outcome is straightforward.
- Conversions: Getting a user to perform a particular action is the ultimate aim of many direct response (DR) campaigns. This could be to complete a form, get to a landing page, or go to a checkout page.
- CR (Conversion Rate): Similar to CTR, it is simply the rate at which users convert — it is calculated as Conversions/Impressions.
- Attribution: The goal of an attribution model, which comes in various forms, is to specify the relationship between impressions and events.
- CPA:Cost per action, or the total cost of each step, is a common performance metric used to measure conversions. Since you are gaining a customer, some refer to it as cost per acquisition.
- ROI: CPA by itself will show how much an action will cost but does not account for its value. A high CPA is appropriate if your action has a high value.
Brand metrics
Brand metrics typically concentrate more on the quantity and duration of individuals who saw the marketing message than the campaign’s activities. Certain metrics mentioned above are employed; CPM, for instance, is frequently used because it is a simple pricing model for brand campaigns.
- Reach
- Viewability
- Survey Measures
Video Specific Metrics
Videos are often used for advertising brands. This year, brands’ programmatic strategies are heavily in favor of video ads.
For the first time, video accounted for over half of all programmatic ads spent in 2022. This is because videos do much better at outreach than all other marketing content channels. According to the eMarketer US Programmatic Video Ad Spending report,
“More than one-fifth of that will come from connected TV or CTV. According to the survey, video is one of the main initiatives for the upcoming year, as reported by 23.6% of the participants. The same number of decision-makers identified video as a major project for 2023, including 18.5% of doers and 30.2% of managers.”
Also Read: Programmatic Advertising Best Practices for 2024
However, it is not common to consider what a user might do after watching a video, such as clicking through. Along with the abovementioned metrics, the following brand metrics are commonly used in video advertising.
- GRP: Gross Rating Points is a term that originated in the television industry. It evaluates the audience covered and is reported as a percentage of the total possible audience within the target set multiplied by the frequency to which users are exposed. This makes it somewhat similar to Reach.
- CPCV: The advertiser pays the cost per completed view for each user who watches the video advertisement.
- CPV: When using Cost per View, an advertiser usually has limited exposure and is willing to measure based on a partial view.
- Audience Dimensions: The advertisers can track who saw the advertisement and the brand’s exposure or performance through that ad. In particular, they could measure and target a range of audience dimensions.
- Demographics: One of the most popular profile types is basic demographic data about the user.
- Geography: The user’s location is likely the most often utilized dimension for targeting and measurement. In general, accuracy to country and state is excellent; however, as we get more specific, it becomes less accurate.
- Frequency:An advertiser may want to show their ad to a specific user more than once but no more than five times.
- Time:Users behave differently during a day or a week. For instance, users at work and home might have distinct product interests.
Conclusion:
While qualitative data has its place, quantitative metrics are essential for understanding the true value of your digital marketing campaigns. The ability to precisely track the advancement of the marketing initiatives will enable firms to determine the efficacy of their tactics.
Marketers can track these metrics consistently to learn what they’re doing well and what needs improvement to improve future campaigns. Assess whether the analytics software the team currently uses can assist in measuring, tracking, and documenting the digital marketing metrics that are most important to the company.
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