In recent days, most of the posts on social networks have been about the effectiveness of digital campaigns. Users do not have any idea about how effective campaigns work.
First of all, I would like to say that if you do not have much more knowledge on digital marketing, please cooperate with experts in the field. Otherwise, it will be a waste of your time and money.
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There are two approaches on this isse:
On the local market
On the global practice
In the local market, advertisers generally do not use certain calculation methods and metrics. Therefore, it is not easy to tell if the campaign worked properly or not. The golden answer is this question:
What is your goal?
If your answer to this question is a specific goal that you have reached (or exceeded), it may be defined as a partially successful campaign. However, keep in mind that effectiveness and efficiency are the main key factors in marketing.
What might be your targets?
The goals could be different. For example, sometimes advertisers want to reach a broad audience. In this case, Reach campaigns may be acceptable. Lower costs or gaining more followers could be success factor.
Mostly, advertisers use lead and message ads in their campaigns. Getting cheaper and more leads could be another success factor.
However, my recommendation is to focus on the volume of sales of products and services. Because the main goal of advertising for businesses is increasing the volume of sales.
We can explain it with an example. Imagine that you get more leads at a very low price, but the sales do not reach the target. This means that even if the ad is successful, there is a problem in sales. In these circumstances, the campaign may be considered a failure.
Therefore, you should define your goal correctly and try to achieve results based on it.
In addition, there are several metrics based on global experience that define the successful results of any digital campaign.
Return on investment (ROI)
Return on investment is calculated as follows:
Return on investment = Net income / Investment cost x 100
This formula is one of the most critical. ROI is a measure of how much money an investor has earned or lost on an investment relative to the amount of money that was initially invested.
Return on ad spend (ROAS)
The return on advertising costs is calculated as follows:
Return on ad spend = Ad revenue / ad cost
It refers to the amount of revenue that is earned for every dollar spent on a campaign. You can easily calculate it. For example, if you spent $100 and earned $250, then your return will be calculated as 2.5. In general, the answer
If it's less than 1, you are losing money.
If it is equal to 1, it is a break point.
If it is greater than 1, you are making money.
Conversion rate
Conversion rate is a metric that takes the number of conversions and divides that by the number of total ad interactions that can be tracked to a conversion during the same time period.
In other words, how many people saw your ad and how many of them converted. For example, if you had 20 conversions from 1,000 interactions, your conversion rate would be 2%, since 20 ÷ 1,000 = 2%.
Cost per acquisition (CPA)
CPA is a metric that measures the cumulative costs of a customer taking an action that leads to a conversion. It is calculated as follows:
Cost per acquisition = Advertising Spend / Acquisitions generated
Cost per lead (CPL)
The cost per lead is calculated based on the leads obtained.
Cost per Lead = Cost of Generating Leads / Total Leads Acquired
Note: Conversion rate, Cost Per Acquisition, and Cost Per Lead are more commonly used metrics.
Cost per click (CPC)
Cost per click is a metric used when driving traffic to websites.
CPC = Total money spent / the total number of clicks
Finally, keep in mind that the effectiveness of campaigns depends on your goals. Sales, lead generation, etc. are the most important ones. The most common metrics are these: ROAS, Conversion rate, CPA, CPL, and CPC.