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Digital advertising is the most measureable media available today. But all too often we see campaigns being measured by an ad metric rather than focusing on what matters most – the impact of a campaign on an actual business objective.

In the thousands of campaigns that clients buy through our eyedemand DSP every year, the most common KPI (key performance indicator) is either clickthrough rate (CTR) or cost per click (CPC). In fact, in 2014, 74% of eyedemand campaigns were optimized to CTR or CPC by clients.

If your end marketing objective is to get clicks on ads, optimizing to CTR totally makes sense. But if you want to get actual people to make a purchase, visit your store, learn more about your service, or any number of other real world business objectives, then relying on CTR alone isn’t helping you.

Here’s an example. An eyedemand client wanted to drive newsletter signups. We optimized media spend in real time towards the types of users who actually signed up for the newsletter. We ignored CPC. Newsletter signups were exceeding client expectations. Halfway through the successful campaign, the client directed us to change tactics and optimize to a low CPC. While we hit the CPC goal, the actual number of newsletter signups per dollar spent went down significantly. Eventually the client reverted to the original tactic.

This classic example illustrates how even though there have been many studies over the years showing no link between CTR and actual conversions, a majority of campaigns are still optimized towards click.

Click-based campaigns are also the most easily targeted by fraud. It’s quite simple for fraud sites to buy robotic traffic that will simply click on ads, but more difficult for them to buy traffic that performs more complicated conversions.

So what are the alternatives?

First – use a third party ad server so you can really identify what’s driving a real world business objective. It’s critical to get postclick/viewthrough tags onto your brand sites so you can see which ads and media are driving conversions, even if the user did not actually click on an ad.

If you can, optimize to purchase. If measuring a direct sale is not possible, find a concrete, desirable action on your brand site, use that as your primary KPI, and stick with it. This can be a visit to a certain page or section, or signups for a newsletter; something that indicates involvement and interest in your brand or product.

To be successful over time, a marketer should “learn” which tactics are driving users to hit a KPI and use that intelligence to improve results. If KPIs are ill-defined, or change mid campaign, then benchmarks are thrown out and improvement/optimization has to start all over again.

Another common pitfall is using multiple, contradictory KPIs. Sometimes a client will ask for a campaign to deliver a high clickthrough rate AND maximize sales. Or worse, optimize towards one KPI throughout the campaign only to measure success by a different KPI at the end of the campaign.

In cases where you simply cannot tag the destination site at the ad level, consider using reach/frequency, viewability, mouseover, or actions within an ad itself as a KPI.

After you’ve determined the main KPI that will form the backbone of your campaign optimization, think about how to refine that KPI in future to reflect what you’ve learned over time.

Consider using an advertiser focused Data Management Platform (DMP) that will tell you the optimal reach, frequency, time spent, viewability, and behavioural and demographic segments that drive the most conversions. This media data can then augment your CRM data. For example, if you’re using a promotion to drive a first time sale, are you storing the media tactic that drove that conversion along with your CRM data to track which tactics are driving the highest long term customer value?

Another layer to add on to your KPI is attribution modeling. Currently, the most common way of measuring which media source drove a conversion is ‘last touch’ – so if a user saw 20 different ads on 20 different websites, and then converted after seeing the last impression on AOL, it would be AOL that gets 100% of the credit for driving the conversion.

One of the flaws of this approach is that the other impressions along the user’s path to conversion almost certainly had some influence; and if you throw out every other publisher except AOL, you’re not replicating the conditions that led to the conversion. The alternative is to use an adserver which allows you to track multiple touches, so you can buy media more efficiently in the future.

Bottom line – the KPI you use, and the layers that you add to that KPI should reflect your actual marketing objectives. One size does not fit all when it comes to online campaign measurement, and a carefully thought-out KPI will pay you back in actual campaign success.

About Ian Hewetson

Ian specializes in bridging the gaps between advertisers, publishers and advertising technologies to make customized strategic solutions work in the real world. In the course of overseeing thousands of campaigns, Ian has been responsible for spearheading revolutionary initiatives including dynamic ad serving, automatic optimization, brand response survey systems and eyereturn‘s audit system, eyeverify. This unparalleled experience has earned the trust of hundreds of clients at top tier publishers, agencies and advertisers.