How to Work Out If Your Ad Campaign is Money Well Spent – Birds on the Blog

How to Work Out If Your Ad Campaign is Money Well Spent

The world of digital marketing – and PPC campaigns in particular – is an often convoluted minefield of challenges and complexities. Arguably one of the best examples of an industry where efficiency matters, building a highly successful ad campaign across multiple channels and markets can be excruciating.

As such, brands need to know whether or not their resources are being used wisely. To determine whether or not a particular ad campaign is delivering results, a variety of metrics and stats must be assessed. But which areas need to be looked at first, and what does it portend for a campaign if these metrics are good (or bad)?

Let’s examine how to determine whether your ad campaign is money well spent, or money better spent elsewhere.

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Calculate ROAS

Arguably the number one indicator of a successful or failing ad campaign is ROAS (return on ad spend). This vital metric helps brands determine whether the campaigns they’ve deployed are actually profitable or not. For instance, an ad campaign that generates $500 in sales and requires $250 in ad spend would be a rather efficient use of resources in most industries, with a ROAS calculation yielding a figure of £2 made for every £1 spent.

However, ROAS calculation involves more than simply determining these two figures; this is a big area for debate in terms of ROAS vs ROI in PPC. If the production of products in the above example cost $300, then the company would ultimately be losing money. Even if an ad campaign itself is efficient, ROAS calculation must also analyze whether or not the efficiency extends to the brand’s operations as a whole.

Clickthrough Rates

Every successful campaign has a natural target in mind with regards to the number of people who will engage. Small campaigns may only target a handful of customers or subscribers, while large-scale PPC campaigns attempt to reach gargantuan audiences. One unifying aspect that brings both types of campaigns together for the purposes of analysis is clickthrough rates (CTR).

CTR helps determine what percentage of an audience found your ad campaign to be interesting enough to engage with it. Again, CTR must be assessed carefully (remember the potential for click fraud, as one example), but generally, the higher the percentage of users clicking on your ads, the more efficient and effective the ad is at resonating with them.

On-Site Time

How long are the people who are clicking on your ads actually spending on your website? If they’re immediately leaving, then even a great clickthrough rate can be meaningless.

Ultimately, on-site time is a crucial component in measuring the value of every campaign and its overall spend. When users spend several minutes perusing one or more pages on your website, then that would be considered a general success in most campaign circles (the one exception to this rule might be isolated landing pages for select ads, designed to silo and funnel users through a specific process). Maximizing on-site time can dramatically enhance the real value of a well-designed PPC campaign.

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Not every campaign can be naturally efficient – this is why so much trial and error is involved in digital marketing. However, determining whether most ad campaigns are in fact valuable can be done by assessing clickthrough rates, on-site time and engagement, and via ROAS calculation.

Author: Isabella Goode

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