Why is pacing critical for monitoring your advertising 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 advertising performance, you need to take a look at your pacing.