Running a marketing campaign is like running a marathon. If you ignore your pace, you’ll fail to achieve your marketing performance goals.
Unlike marathon runners, most marketers fail to monitor their pace while their campaigns are running. So, they’re oblivious to their true marketing performance until it’s too late. It’s not until they reach the “finish line” of the campaign when they discover they failed to achieve their marketing objectives.
But it doesn’t have to be this way.
Marketers can learn a lot from marathon runners when it comes to monitoring performance towards goals. The best athletes constantly monitor their pace throughout the race. To improve your marketing performance, you should operate like an elite athlete by closely monitoring your pace while running your marketing campaigns.
What is “pacing” in running?
When running a marathon, you set a personal goal for your finish time. Then you break that goal into intermediate milestones in order to track your progress while you are running the race.
For example, suppose you wanted to finish a 26.2 mile marathon in 3 hours. Here’s a pacing plan that will allow you to finish at exactly 3 hours:
At this point, you’re not done. You still have to run the race. Your excel spreadsheet isn’t going to run your marathon for you!
While running the race, you check your time at each interval and compare that to your pace plan to determine if you are running faster or slower than your plan. If you’re running slower, then you need to pick up the pace to make up for lost time and to reach your goal of running under 3 hours.
What is “pacing” in marketing?
Pacing in marketing is very similar in concept to pacing in running. You set intermediate goals based on a campaign goal and measure your performance at intervals. However, instead of just one goal of a finish time, you have many goals such as spending, impressions, clicks, conversions, and sales. Also, instead of just one race, you have many placements running concurrently. This gets even more complicated when you’re running many campaigns concurrently. But the core concept of pacing in marketing is the same as pacing in running.
Why is pacing critical for monitoring your marketing performance?
Suppose you are spending US$ 20,000 on a 30-day placement on a website at a rate of $ 2.35 CPM. Based on your past experience, you expect a 1.8% click through rate, a 4.5% conversion rate, and a $ 9.50 average sale. Based on these assumptions, you can calculate the goals you are planning to achieve with this placement as follows:
- Net Media Cost = $ 20,000
- Impressions = (Net Media Cost ÷ $ 2.35 CPM ) × 1000 = 8,510,638
- Clicks = Impressions × 1.8% Click Through Rate = 153,191
- Conversions = Clicks × 4.5% conversion rate = 6,894
- Sales = Conversions × $ 9.50 average sale = $ 65,489
After you’ve been running your placement for 4 days, you check on your performance to make sure everything is on track. First you log into your ad server and look at the dashboard:
You see that your ad is running and you are getting a 2.02% click through rate, which is better than your goal of 1.8%. So, this looks great.
Then your log into your e-commerce system and look at the dashboard:
You see that the sales are coming in and you are getting an average sale of $10.81, which is better than your goal of $9.50. So, sales are looking great, too.
So, based on your ad server and e-Commerce dashboards, it looks like your campaign performance is on track, right? Wrong!
Unfortunately, you’re not getting the full picture of your marketing performance. These dashboards are lulling you into complacency and setting you up for an unpleasant surprise at the end of the flight. To get an accurate picture of your marketing performance, you need to take a look at your pacing.
How to calculate pacing for marketing
To track your pacing towards your goals you, you need to break these goals down into interval milestones. To avoid getting too complicated with this example, let’s assume that the ad delivery will be evenly paced throughout the placement. And let’s break the goals into daily goals as our interval. Since your placement is 30 days, simply divide each of the goals by 30 to get your daily pace and accumulate these goal on day by day schedule as follows:
Now let’s gather and standardize the performance data from your ad server and e-commerce systems:
The next step is to calculate your pacing to see how you are performing against your plan. The formula for calculating pace is simple:
Pace = ( Actual Result – Planned Result ) ÷ Planned Result
Pace is typically expressed as a percentage preceded by a plus or minus sign. A positive value means you are pacing ahead of your goal. A negative value means you are pacing behind your goal. The value also indicates how much you will beat or miss your goal by if your performance continues as is. Clearly, a negative number means you need to make corrections to get your performance back on track.
Now let’s use the Pace formula to calculate our pacing for each of the days and each of the goals. Here is the resulting pacing schedule:
As you can see from the pacing schedule above, we’ve got a problem on our hands. Here is the Pace for each of your goals:
- Net Media Cost = -18.24%
- Impressions = -18.24%
- Clicks = -8.23%
- Conversions = -20.47%
- Sales = -9.54%
This problem becomes clearer when you visualize your pacing on a chart. For example, here’s your sales pacing chart:
How you can use pacing to fix your marketing problems
Don’t worry. Although your numbers look bad, all is not lost. The good news is we caught these problems early in your campaign. It’s only day 4 and we’ve got 26 more days left. So, there’s plenty of time to get things on track. This is why we track pacing!
Let’s take a look at the pacing chart for all of your metrics:
Do you notice a pattern? The pacing for all four of your metrics follow a similar pattern. As we observed earlier in our ad serving and e-commerce dashboards, our click through rate is better than planned at 2.02% and our average sale is better than planned at $10.81.
By bringing those two data sources together, we discover that our conversion rate is behind plan at 3.90% versus our goal of 4.5%.
Conversion Rate = Conversions ÷ Clicks = 731 ÷ 18,744 = 3.90%
Although we certainly have a conversion problem to fix, Conversion Rate isn’t our main culprit. Take a look at the pacing of our impressions:
Impressions are behind pace by a huge margin. The problem is clear: your publisher isn’t serving enough impressions. As a result, you’re not hitting your other objectives. And the solution is very simple: contact your publisher and tell them they need to get their ass in gear and start delivering the ad impressions they promised you.
After fixing the problem our sales got back on track
After we contacted the publisher, they increased their ad delivery and we saw this right away in our ad server dashboard.
And as a result of increasing the number of advertisements, we saw an improvement in our pacing in all of our metrics:
And our main metric of sales is ahead of schedule:
Monitoring your pacing is critical to marketing success
Had you not been monitoring your pacing, you would not have known you had a problem until it was too late. And without pacing, it would have been difficult to diagnose the problem and to find a solution. After you implemented the solution, it was easy to see how well the solution worked by monitoring pacing.
In marketing, you never know where the inevitable problems will creep up on you. If you’re not monitoring your pacing, you won’t notice your problems. With pacing in place, you’ll notice the problems immediately.
So, why aren’t you monitoring your pacing?
If you’ve read this far, you surely see the value in monitoring the pacing of your marketing campaigns. And you probably don’t currently have a way to monitor your pacing.
One way to monitor pacing is in Excel. All the examples shown in this article were done in Excel. You can manually create them by gathering data from your media plan, your ad server, your e-commerce system, and crunch the numbers to calculate your pacing. The math is not too complicated. However, there are lots of calculations and it’s a lot of grunt work to gather and standardize all the source data. This is not the kind of work that gets you up in the morning. It’s the kind of work that’s perfect for a computer to handle.
Fortunately, there’s a better way… Bionic is the first and only system to automatically monitor your pacing. All the calculations are built right in. And the visualizations are a lot nicer than you’ll get in Excel:
If you already have Bionic and want to learn about its pacing features, contact your support representative. If you don’t have Bionic, you can request access on our website here: http://www.bionic-ads.com/mpm