Now, you\u2019re ready to measure the results.\u00a0\u00a0<\/span><\/p>\n Metrics are your ally.\u00a0<\/span><\/p>\n You can\u2019t do your job well without them. And your clients can\u2019t measure how good you are at your job without that data.<\/span><\/p>\n In this wonderful digital era, we\u2019re not short on metrics. CPA, LTV, CR, ROAS, the list goes on.\u00a0<\/span><\/p>\n But how do you know which ones matter and why? How do you perform a proper ad ROI analysis? How can you tell if your ads are successful? How do you communicate results to clients in your monthly reports?<\/span><\/p>\n These are all legitimate questions even among seasoned marketers.\u00a0<\/span><\/p>\n While the metrics you choose will depend on your business goals, we\u2019ve narrowed them down to the ones we use regularly to measure our return on investment, or ad ROI metrics.\u00a0<\/span><\/p>\n Use this guide to gain a better understanding of each metric that matters, the ones to avoid, and how to set realistic goals for your next ad campaigns.\u00a0<\/span><\/p>\n Are you a digital agency? Vendasta offers white-label digital solutions for companies that sell to local businesses. <\/b>Contact us today<\/b><\/a> to learn about how to resell our apps and services under your brand.<\/b><\/p>\n Choosing the right digital advertising metrics to track and measure is crucial to your campaign\u2019s success. If you aren\u2019t tracking advertising efforts correctly through <\/span>marketing automation software and tools<\/span><\/a>, you\u2019ll never know what\u2019s working, and you won\u2019t be able to communicate success to your clients.<\/span><\/p>\n The first step to determining your ad\u2019s success is setting goals with benchmarks that matter.<\/span><\/p>\n Determining your core ROI goals means you\u2019ll be able to measure data that tells the story of how your target audience interacted with your ads.<\/span><\/p>\n Here are a few of the key metrics to track that will help you measure success and determine advertising ROI with your Ad Analysis:<\/span><\/p>\n How much does it cost you to acquire a new lead in any given channel?<\/p>\n Knowing the cost to acquire a client in your business is the basis of your marketing budget, so it\u2019s crucial data to add to your ROI analysis. Combined with other ad data, this will determine whether your business will make a profit.<\/span><\/p>\n Ideally, you\u2019ll want to get a sense for which mix of ad channels (Search, Facebook, Display) work best for your clients in the industries you focus on. Then you\u2019ll be able to better optimize your ad budget going forward.<\/span><\/p>\n Joe Castro, Search Engine Marketing Manager for <\/span>Elevation Advertising<\/span><\/a>, told me that it all starts with leads:<\/span><\/p>\n “Lead submissions are important to ROI because your client can track lead submissions throughout the buyers\u2019 journey (hopefully through their CRM). They will then be able to see which channels are driving the most leads and which ones are driving the most quality leads (and therefore ROI). As more leads are generated and your client better understands customer lifetime value, the average sales cycle, etc., then you\u2019ll be able to better allocate budget based on their ROI.”<\/span><\/p>\n<\/blockquote>\n Here\u2019s the formula for CPA:<\/p>\n ROI Analysis Digital Advertising<\/p><\/div>\n CPA is a simple but valuable formula. Knowing how much it costs to acquire a new lead is key to understanding your ad ROI as a metric.<\/span><\/p>\n How to Analyze the CPA of Your Ad Campaign:<\/b> This depends a lot on the industry, location, ad type, season, etc. Determining this number for your clients may take some time as your campaigns accumulate data.<\/span><\/p>\n SAAS Marketing Consultant <\/span>Sid Bharath<\/span><\/a> explains:<\/span><\/p>\n I’ve helped clients like Olark and Thinkific to optimize their ads and, regardless of what platform you use, it’s a math problem.<\/span><\/p>\n Ultimately, the cost of acquiring a customer should be less than your average LTV, preferably 1\/3rd of it. Your cost is the product of the cost per click ($X), the conversion rate from click to free trial (Y%), and the conversion rate from free trial to paid customer (Z%). So, to analyze your ad performance, you need to be looking at those three digital advertising metrics – X, Y, and Z. These are the universal indicators across any ad platform.<\/span><\/p>\n You\u2019ll also get a better idea as you run campaigns for other clients in the same industry. <\/span>Wordstream<\/span><\/a> has a useful graphic that compares AdWords (the link also includes Facebook ad CPA averages) CPA averages in several industries:<\/span><\/p>\n adwords-industry-benchmarks-average-cpa<\/p><\/div>\n However, we still don\u2019t know the actual value of your client\u2019s customers. The next thing we’ll discuss is LTV, which is essential for further ROI analysis.<\/p>\n Do you know the lifetime value of your client\u2019s customers? You should!<\/span><\/p>\n Why? Well, you\u2019re not necessarily going to have access to your client\u2019s balance sheet, but they should be able to give you a number that represents an approximation of the revenue a new customer brings in, with all associated costs factored in.<\/span><\/p>\n If you know your client\u2019s LTV, you\u2019ll be able to compare it directly to the cost of acquiring a new client through your digital ad campaign.<\/span><\/p>\n \u201cThis is the sum of all transactions, or the total value a customer will spend over their lifetime,\u201d states Baruch Labunski, co-founder of <\/span>RankSecure<\/span><\/a>. \u201cIt is important to know so you can determine how much you can afford to spend to acquire them, and also retain them over time. If this number is high that can help justify increasing your marketing investments, knowing you\u2019ll get the returns over time.\u201d<\/span><\/p>\n Getting your clients to simply provide their customer LTV can be a challenge. Many just don\u2019t know!<\/span><\/p>\n Here\u2019s the formula you can use to help them get the answer you need. Our <\/span>digital ads<\/span><\/a> team always asks for LTV because it\u2019s so essential for providing advertising ROI calculations.<\/span><\/p>\n How to Analyze the LTV of Your Ad Campaign:<\/b> If you\u2019re just starting out, you\u2019re not going to know this data for a while. However, it\u2019s something that you should start tracking immediately! Start by using your client\u2019s customer LTV. This is your new benchmark, and attracting customers with a higher LTV from your ads is the goal.<\/p>\n As your campaign progresses, check in with your client to be sure they\u2019re tracking specific campaign LTV based on the quality of the leads your digital ads are bringing in.<\/span><\/p>\n Pro Tip:<\/b> Alex Andrade-Walz, a Growth Marketer at <\/span>Spatially<\/span><\/a> notes that if you\u2019re having trouble tracking attribution, looking at “session duration” in Google Analytics can be a good proxy for lead quality:<\/span><\/p>\n \u201cBy breaking session duration down by source and medium, you can see how your marketing channels compare. If, for example, you see that traffic from LinkedIn spends an average of three minutes on your site, while traffic from Facebook only spends half a minute, you can infer that your LinkedIn targeting is bringing in higher quality leads that are more interested in your product or service. At this point, traditional metrics like click-through rate and reach are all moot if the traffic isn’t sticking around.\u201d<\/span><\/p>\n<\/blockquote>\n Now that we understand how to calculate and analyze the lifetime value of your client\u2019s customers, we\u2019ll be able to track the revenue generated by your digital advertising campaign. As you can see below, you just need to multiply your campaign\u2019s conversions by LTV and closing ratio (50% would be .5).<\/span><\/p>\n Why include closing ratio? Obviously, every new lead you generate isn\u2019t going to become a customer, so you\u2019ll need to factor in how often your client is able to close new leads to estimate campaign revenue correctly.<\/span><\/p>\n How to Analyze the Revenue of Your Ad Campaign: <\/b>As you perform your ROI analysis, it\u2019s basically impossible to tell you what optimal revenue is per campaign. It totally depends on your goals, the campaign type, and the budget. A decent rule of thumb is a 5 to 1 revenue to cost ratio.<\/p>\n Chris Leone<\/span><\/a> notes that,<\/span><\/p>\n \u201cA 5:1 ratio is middle of the bell curve….A 2:1 revenue to marketing cost ratio wouldn\u2019t be profitable for many businesses, as the cost to produce or acquire the item being sold (also known as cost-of-goods-sold, or COGS) is about 50% of the sale price. For these businesses, if you spend $100 in marketing to generate $200 in sales, and it costs $100 to make the product being sold, you are breaking even. If all you accomplish with your marketing is break even, you might as well not do it.\u201d<\/span><\/p>\n<\/blockquote>\n ROAS is an illuminating digital advertising metric to use for ad campaigns, and a lot of marketers use it interchangeably with ROI itself. However, there are significant differences between the two. What is the difference between ROI and ROAS?<\/span><\/p>\n Tim Mayer, CMO of <\/span>Trueffect<\/span><\/a> explains:<\/span><\/p>\n \u201cROI measures the profit generated by ads relative to the cost of those ads. It\u2019s a business-centric metric that is most effective at measuring how ads contribute to an organization\u2019s bottom line. In contrast, ROAS measures gross revenue generated for every dollar spent on advertising. It is an advertiser-centric metric that gauges the effectiveness of online advertising campaigns.\u201d<\/span><\/p>\n<\/blockquote>\n So advertising ROAS is much more focused on the results from specific campaigns, while ROI incorporates the bigger picture relative to the business. This means that it\u2019s much easier for agencies like yours to be tracking and analyzing advertising efforts with ROAS. You know the cost and you can calculate the revenue.<\/span><\/p>\n While it\u2019s tempting to pump up other results you\u2019ve accumulated during your client’s ad campaign, it\u2019s important to resist this desire!<\/span> \u201cOne thing I would NOT do is try to push vanity metrics as a way to mask poor performance. Metrics like clicks, shares, and engagements are fun to look at, but unless they are driving primary conversions (i.e. leads) they are not valuable to their sales funnel.\u201d<\/span><\/p>\n <\/p>\n<\/blockquote>\n This isn\u2019t to say you should ignore this data, but you shouldn\u2019t base campaign goals around them. Think of things like impressions, shares, clicks, and engagements as clues that help you analyze the health of your campaigns. They\u2019re valuable to track and understand, but they shouldn\u2019t take the focus away from the core digital advertising metrics that can make or break your campaigns.<\/span><\/p>\n Ensuring that your clients understand what\u2019s happening in their campaigns is super important.<\/span> Try incorporating more universally-understandable local business terms like in-store visits, direct phone calls, and real-life sales to drive home the genuine value of digital advertising.<\/span><\/p>\n Let\u2019s dive in a bit more into ways to communicate with your clients to know what to expect from your digital ads campaigns.<\/span><\/p>\n Businesses have all sorts of different goals for ad campaigns. For example, one business may want to increase phone calls, while another might want to improve their brand\u2019s reputation.<\/span><\/p>\n Scott M Warren, owner of <\/span>Exfil Project<\/span><\/a>, elaborates<\/span><\/p>\n \u201cFrom a <\/span>lead generation<\/span><\/a> perspective, we also have clients where our primary goal is to drive leads into a sales funnel. This is most often to cold audiences just trying to get name and email addresses to add to the client\u2019s email list. The client creates a relationship with their leads and sales happen later on, months later. One of my particular long-term clients has more than doubled the revenue of her business through email and because of the increase in leads that we\u2019ve driven through Facebook ads. Pretty awesome.\u201d<\/span><\/p>\n<\/blockquote>\n Everything you track should be based on the specific campaign goals of that business. Anything that doesn’t tie into these goals is only worth reporting if it helps tell the overall story of how the campaign is performing.<\/span><\/p>\n Questions to ask clients while setting up the campaign goals<\/b>:<\/span><\/p>\n Making sure that clients are aware of what to expect from your digital ads campaign is a tricky thing! It\u2019s really important that you explain both the capabilities and limitations of the digital ads campaign that you\u2019re launching. Here are a few ways you can set client expectations up front:<\/span><\/p>\n Your reports shouldn’t just show that you\u2019ve increased your client\u2019s impressions and clicks\u2014they should demonstrate that you\u2019ve generated more phone calls and store visits, and that you\u2019ve given them a positive return on their investment.<\/span><\/p>\n Having a robust <\/span>ad analysis reporting tool<\/span><\/a> that features everything clients need to know is on the top of this list. Many of your clients may never look at it, but they\u2019ll want you to be able to explain how things are going in layman\u2019s terms.<\/span><\/p>\n Here\u2019s a look at our digital ads reporting:<\/span><\/p>\n Hot tip:<\/b> In our digital advertising reports, we include these real-life results as its own section on our campaign overview page for clients. Here, we track qualified calls and in-store visits verified with our geofencing technology. The real-life results you track may vary for your client\u2019s campaigns and objectives, but make sure you include these business tangible metrics alongside your impressions, clicks, and other advertising KPIs.<\/span><\/p>\n We use slightly different terminology for the data in our reports, but the formulas are the same.<\/span><\/p>\n Improving digital ad ROI is obviously the goal of every campaign ever created. The answer can be different for each business, industry, ad type, and beyond. However, there are a few fundamentals that can be applied across the board.<\/span><\/p>\n Understand your target audience:<\/b> Understanding the psychology of your target audience is essential if you want to intrigue them and get them to click on your offer. Make sure you do your research up front\u2014start by surveying your clients to narrow down their target audience and <\/span>understand their demographics for digital advertising<\/span><\/a>. This will cut down on wasted spend by eliminating people who won\u2019t care about your client\u2019s ad or offer.<\/span><\/p>\n Use AB testing to hone your message:<\/b> AB testing or split-testing is basically a one-on-one throw down between two ads at a time. The goal is a darwinian-esque evolution into the perfect ad copy, landing page, and offer for your campaign.<\/span><\/p>\n \u201cAccurate A\/B tests can make a huge difference to your bottom line,\u201d notes <\/span>Cameron Chapman<\/span><\/a>. \u201cBy using controlled tests and gathering empirical data, you can figure out exactly which marketing strategies work best for your company and your product. When you figure that one variation might work two, three, or even four times better than another, the idea that you would conduct promotions without testing starts to seem a bit ludicrous.\u201d<\/span><\/p>\n Regular Digital Advertising ROI Analysis:<\/b> Tracking advertising efforts is an essential way to improve your ROI. The more data you get, the more trends you\u2019ll see in your metrics, which will help you improve your client\u2019s ad campaigns. Now that you understand what to track, you shouldn\u2019t be part of the <\/span>76% of marketers<\/span><\/a> who are still struggling to track the ROI of their campaigns. Keep your finger on the pulse of your ad campaigns and take note of actions that improve or hurt performance.<\/span><\/p>\n According to a recent forecast by eMarketer<\/a>, U.S. spending on digital advertisements is expected to hit <\/span>$300 billion in 2024<\/span>, surpassing total TV ad spending for the <\/span>first time<\/span> ever.<\/span><\/p>\n The targeting capabilities and sheer volume of internet users make digital advertising a no-brainer in most industries, and your clients are more likely than ever to see the value in digital ads. This means you\u2019ll be able to spend less time educating them and more time optimizing your campaigns.<\/span><\/p>\n With a firm grasp on how to analyze ads and communicate ROI results, you\u2019ll run successful campaigns and be able to position yourself as an essential part of your client\u2019s business.<\/span><\/p>\n If you\u2019d like help running digital ad campaigns complete with outstanding ROI analysis and reporting, <\/span>request a demo now<\/span><\/a>.<\/span><\/p>\n You can also check out our Digital Advertising ROI Report Template <\/strong>\u00a0if you\u2019d like a report that breaks down each key metric by advertising channel, and makes your value to clients crystal clear.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" You\u2019ve worked hard on launching that great marketing campaign.\u00a0 Now, you\u2019re ready to measure the results.\u00a0\u00a0 Metrics are your ally.\u00a0 You can\u2019t do your job well without them. And your clients can\u2019t measure how good you are at your job without that data. In this wonderful digital era, we\u2019re not short on metrics. CPA, LTV, […]<\/p>\n","protected":false},"author":52,"featured_media":122976,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"on","_et_pb_old_content":"You\u2019ve worked hard on launching that great marketing campaign.\u00a0<\/span>\r\n\r\nNow, you\u2019re ready to measure the results.\u00a0\u00a0<\/span>\r\n\r\nMetrics are your ally.\u00a0<\/span>\r\n\r\nYou can\u2019t do your job well without them. And your clients can\u2019t measure how good you are at your job without that data.<\/span>\r\n\r\nIn this wonderful digital era, we\u2019re not short on metrics. CPA, LTV, CR, ROAS, the list goes on.\u00a0<\/span>\r\n\r\nBut how do you know which ones matter and why? How do you perform a proper ad ROI analysis? How can you tell if your ads are successful? How do you communicate results to clients in your monthly reports?<\/span>\r\n\r\nThese are all legitimate questions even among seasoned marketers.\u00a0<\/span>\r\n\r\nWhile the metrics you choose will depend on your business goals, we\u2019ve narrowed them down to the ones we use regularly to measure our return on investment, or ad ROI metrics.\u00a0<\/span>\r\n\r\nUse this guide to gain a better understanding of each metric that matters, the ones to avoid, and how to set realistic goals for your next ad campaigns.\u00a0<\/span>\r\n\r\nAre you a digital agency? Vendasta offers white-label digital solutions for companies that sell to local businesses. <\/b>Contact us today<\/b><\/a> to learn about how to resell our apps and services under your brand.<\/b>\r\n\r\nAd Analysis: Which Digital Advertising Metrics Matter?<\/h2>\n
CPA \u2013 Cost Per Acquisition<\/h3>\n
\n
![\"ROI](\"\/wp-content\/uploads\/sites\/6\/2020\/05\/download-9-1.webp\")
![\"adwords-industry-benchmarks-average-cpa\"](\"\/wp-content\/uploads\/sites\/6\/2020\/05\/download.webp\")
LTV – Lifetime Value<\/h3>\n
![\"roi-analysis-digital-advertising-metrics-ltv-1024x267\"](\"\/wp-content\/uploads\/sites\/6\/2020\/05\/download-1.webp\")
<\/p>\n\n
CR – Campaign Revenue<\/h3>\n
![\"roi-analysis-digital-advertising-metrics-cr-1024x267\"](\"\/wp-content\/uploads\/sites\/6\/2020\/05\/download-2.webp\")
<\/b><\/p>\n\n
ROAS \u2013 Return on Advertising Spend<\/h3>\n
\n
![\"roi-analysis-digital-advertising-metrics-roas\"](\"\/wp-content\/uploads\/sites\/6\/2020\/05\/download-3.webp\")
How to Analyze the ROAS of Your Ad Campaign:<\/b> The answer here is similar to revenue…it depends on a lot of campaign and industry factors. Most of the big digital ad brands would be VERY touchy if you asked them for their average ROAS per industry! However, at least a 5:1 ratio is a good place to start.<\/span>
Setting your own benchmarks and campaign goals based on past performance is the best way to proceed and prep client expectations.<\/span><\/p>\nDigital Advertising Metrics to Avoid<\/h3>\n
Justin Adelson, founder of <\/span>Perfect Pixel Marketing<\/span><\/a>, notes:<\/span><\/p>\n\n
How to Translate ROI Analysis Results<\/h2>\n
If things are going well, you need to be able to communicate what\u2019s working, and why the campaign is so awesome! If the campaign is struggling, you need to be able to analyze it to know why and explain your plan to turn things around.<\/span>
Oftentimes, a small business owner isn’t an advertising expert, which is why they hired you in the first place. A very important part of the reporting process for them then is to communicate in real-life business results that your digital advertising is driving. Just keep in mind that they are not going to understand all of these advertising ROI metrics.<\/span>
So what does that mean exactly?<\/span>
Check your digital advertising jargon at the door! Remember that many local business owners don\u2019t speak the language of digital marketers and might not understand LTV, CPC, ROAS, and all the other acronyms us marketers use to communicate results.<\/span>
Analyzing your ads and translating your results into relevant digital advertising data is a critical way to help your client understand what you’re doing for them. Numbers like in-store visits and phone calls help prove the value of digital advertising to clients.<\/span>![\"roi-analysis-digital-advertising-metrics-client-language\"](\"\/wp-content\/uploads\/sites\/6\/2020\/05\/download-4.webp\")
<\/p>\nSetting Ad Campaign Goals<\/h3>\n
\n
\n
Setting Client Expectations<\/h3>\n
\n
<\/span><\/li>\n
<\/span><\/li>\nROI Analysis Reporting Results<\/h3>\n
![\"City](\"\/wp-content\/uploads\/sites\/6\/2020\/05\/download-5.webp\" "\\"download")
![\"campaign-performance-markup-1024x457\"](\"\/wp-content\/uploads\/sites\/6\/2025\/07\/download-7-10.webp\")
<\/p>\nHow to Improve ROI<\/h3>\n
\nProviding Digital Advertising ROI Going Forward<\/h2>\n
\r\n\r\nTable of Contents<\/h2>\r\nAd Analysis: Which Digital Advertising Metrics Matter?<\/a>\r\n