How Do I Measure ROI?
There are two common ways to measure the success and return on investment (ROI) of a digital, conversion-focused campaign: Click Through Attribution (Actions) and View Through Attribution (Impressions). You can view both in the Cliques Console. The following article explains how each metric is measured, and briefly discusses the pros & cons of each as it relates to measuring ROI.
Measurement Methodology - An Example
Say you're advertising backpacks for back-to-school month. In those 30 days, you spend $10,000 on ads. During that same month, 1,000 people each buy one backpack from your store online at a price of $100/backpack ($100,000 total revenue).
However, 500 of those people were never exposed to your ads.
Of the remaining 500 who did see an ad, 50 clicked on an ad prior to buying a backpack. The other 450 had only been served an impression—but they didn't click. How do we know? Because our action beacons are installed on their order confirmation page.
So, this means that for this month:
|View-Through CPA||$10,000 (cost) / 450 (view-based actions)||$22.22|
|Click-Through CPA||$10,000 (cost) / 50 (click-based actions)||$200|
|ROI||$50,000 (attributable revenue) / $10,000 (cost)||500%|
In this simplified example, however, we know the exact revenue attributable to each conversion, which allows us to calculate an exact ROI. In reality, this may be harder to pinpoint for a number of reasons, which is why people generally use CPA numbers as a proxy for ROI. Just remember that if CPA is lower, ROI is higher, and vice versa.
View-Through and Click-Through CPAs: Pros & Cons.
Summary: View-through attribution gives a more holistic view of the success or failure of a campaign, but can give a campaign more credit than it's necessarily worth. Click-through attribution is less forgiving and more precise, but can be misleadingly harsh.
View-through gives you a broader sense of the success of your campaign because seeing an ad, even if a customer doesn’t always click on it, reinforces the prevalence of your brand and products. If you are running multiple campaigns with different creatives (or, for that matter, any changed variables), looking at your view-through numbers can also tell you if one campaign has a broader reach, and, if your variables are controlled, why.
The biggest con of view-through is that you can never be sure if eventual conversion was provoked by the ad you showed. In view-through, there is no way to be sure that a customer even saw the ad—perhaps they ignored it. There’s also a chance that they might have seen the ad, but it didn’t happen recently enough (for Google analytics, it has to be within 28 days), so their purchase is technically attributable to your ad, but technology doesn’t know that.
Click-through attribution is much more black and white: either the ad was clicked on or it wasn’t. With view-through conversions you never can be completely certain if a consumer’s action was spurred by your ad, but with a click-through conversion there's very little room for doubt that your ad influenced that conversion.
But as you're likely aware, relatively few people click on ads, and even fewer people buy something shortly after clicking. Thus, click-through CPA's will generally be substantially worse than view-through CPA's, and does not account for anyone who was influenced to convert by seeing your ad, but did not click.
Best Practice: Set a lofty goal for your View-Through CPA, and a very forgiving goal for your Click-Through CPA. Most of your conversions will not come from clicks, but it's important to make sure that handful do to validate your targeting and overall campaign strategy.