Five Steps for Digital Ad Optimization

There are a lot of ways to optimize digital ads and ad spend during a marketing campaign. If you're looking to optimize on website results, follow these five steps for effective optimization.

Step 1: Run and Test Lots of Ads

Many digital marketing campaigns are created in a single point in time, and therefore generally have only one strategic direction, often based on a theme or creative idea. And while this is necessary for larger traditional media such as TV and print, digital doesn’t have to be constrained to this process due to the agility of the medium. In other works, it’s quick and cheap to change.

Because of this, go into a planning session for digital with a no-holds-barred mentality. Have the creative director throw out 5 ideas and quickly make all of them. Run them against each other in the digital space and see which one gets the most engagement. You then have a great starting point for the bigger media that cost more and can be hard to validate prior to launch.

By starting with a lot of ideas, you can test then real-time to get closer and closer to what resonates with your consumer. And don’t stop testing when one concept has garnered the most engagement. You should then begin tweaking the copy, colors, images, whatever you want! This type of testing can be done very inexpensively if done strategically. For example, the digital designer can easily make 3 digital ads with the same concept, but with a different CTA placement, or varying copy.

Overall, you should aim to consistently test three concepts: A typical A/B test, and a radical concept. This will ensure you are constantly gauging the engagement of your audience to understand them better.

For example, generate an impression split of:

  • A = Significant sample size needed to test
  • B and C = Remaining Impressions divided by 2

Your ads would run as:

B

C

A

This means you have (at least) two well-performing ads running against each other with the most impressions, while a new ad version is being tested on the least number of impressions needed for a significant test.

Step 2: Compare Click-Through Rate with Visit Rate

So you have a bunch of ads running, and they all have different Click-Through-Rates. How do you know if the users that clicked the ads are engaged users? Compare the CTRs with Visit Rate of each ad!

What is Visit Rate, you ask? Read more here.

By comparing CTR directly to Visit Rate, you go far beyond the cost of a click into the VALUE of a click.

For example, say you had the following metrics for your ads:

 

CPC

CTR

Ad version X $1.50 0.08%
Ad version Y $2.40 0.05%
Ad version Z $2.00 0.04%

Which ad should you optimize on? This is a very difficult decision based solely on the metrics at hand. What if all the clicks on Ad Version X are accidental clicks? You won’t know that until you add in both the visit rate and cost/visit to the comparison.

Now you have the following metrics for your ads:

 

CPC

CTR

Visit Rate

Cost per Visit

Ad version X $1.50 0.08% 55% $2.73
Ad version Y $2.40 0.05% 95% $2.53
Ad version Z $2.00 0.04% 85% $2.35

You should have a much better time decided which ad to optimize based on this new information. Ad Version Z gets more people to your site for less money than the other two ads, even though the CTR is the lowest and the CPC isn’t the lowest. Visit Rate makes all the difference!

Step 3: Ensure Your Website is Tracking KPIs

What is the purpose of your digital marketing ads? Is it to sell products? Is it to fill out a form? Is it to generate awareness by watching a video? If so, those items need to be tracked on your website to measure the rate at which people coming from the ads do those particular actions.

Just like Visit Rate above, if you aren’t measuring how many users that click the ad, visit your site, AND do the desired action, you’ll never know for CERTAIN the ad is performing as intended. Or you may see the ad is better at one action than another.

Let’s say you have three potential items that users can do on your website:

  1. Buy the product
  2. Sign up for newsletters
  3. Watch a video on the product

These actions are indicative of the consumer’s level of interest, and so should all count as KPIs.
Now you have two ads running on the same network and get the following metrics from the campaign analyst:

 

Sessions

Conversion Rate (Buy the Product)

Newsletter Rate (Fill Out Form)

Video Rate (Watch the Video)

1,200 5.50% 0.50% 0.87%
800 0.25% 2.50% 35%

This level not only gives you information as to which ad is best at traditional conversions (i.e., buying the product), but it also gives you great insight into the consumer mentality when they click the Y U No? Ad. You can now turn that ad into an awareness ad on your earned digital channels, such as social media, to help get consumers more engaged about the product.

Step 4: Measure Engagement per Impression

In the array of digital metrics associated with an ad, these two are the furthest apart. That’s exactly why connecting them matters so much, because by doing so you will know whether your ads are REALLY reaching the right people - From the very beginning of the ad lifecycle.

A tale of two ads:

“It was the best of times, it was the worst of times”

A digital ad is placed on TennisPros.com, chosen by the media buyers for content targeting (tennis rackets). It is also placed on WomensHealth.com, chosen for audience/demographic targeting (Women ages 34+ focused on health and sports lifestyles).

 

CPM

Impressions

CTR

CPC

TennisPros.com $0.11 1,200,000 0.08% $0.13
WomensHealth.com $0.25 3,400,000 0.04% $0.61

This information is good to know and track, because you certainly don’t want an ad going off the rails with no clicks or ridiculously high CPC. But can you tell if the ads are reaching the right people?

Let’s add more layers:

 

CTR

CPC

Visit Rate

CPVisit

TennisPros.com 0.08% $0.13 65% $0.20
WomensHealth.com 0.04% $0.61 80% $0.76

From this additional layer of metrics, it looks as though the lower ad buy cost for TennisPros.com is keeping it more cost effective than WomenHealth.com, even though the latter has a higher Visit Rate than TennisPros.com. Ultimately, paying less per impression is leading to paying less per visit. (At least in this case.)

Let’s add the final layer of metrics – the conversions:

 

Conversions

Site Conversion Rate

Conversion/Impressions

Cost/Conversion

TennisPros.com 13 2% 0.00108% $10.15
WomensHealth.com 101 9% 0.00296% $8.43

With this final layer of metrics, the ad on WomensHealth.com can be optimized effectively, as it is getting more conversions at a lesser cost than the ad on TennisPros.com

Step 5: Put Them All Together and Start Over

Now that you know the full story of the ads, user experience, and onsite activity, you can restructure your ad strategy to optimize ad versions, dedicated clicks, consumer purchase funnel messaging, and audience targeting. Now go back to Step 1 and start again!

Happy Analyzing!

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