Understanding ad conversions

Posted by on Dec 5, 2012 in Advertising

In the past few weeks, I went from having no ads and no experience running ads, to launching and trying to optimize our campaigns here at AdStage using our ad analytics dashboard and Google Analytics.

This week, I want to go into more depth about how to use the dashboard and ad analytics, the various ad metrics, and how you can use them to improve your campaigns. Ad terminology and the fact that there are many metrics to follow, can easily get a new advertiser off track. Our dashboard tries to make this as simple and useful as possible, but I think it still warrants some helpful discussion. You can also check out our post on ad terminology here.

You’ve probably seen the overview dashboard in previous posts, but here’s what mine looked like after a week of running ads:

Online advertising metrics

Week 2 Dashboard

The key metrics we track in the dashboard are ad conversions, clicks, impressions, CTR, average CPC, average CPA, and spend for each network along whatever time interval you select.

All of these metrics can be useful for different campaigns, but for my campaigns, I think ad conversions are the most important metric. Clicks, impressions, CTR, and average CPC let me know general information about the activity surrounding my ads and whether people are seeing and interacting with the ads at all. I want enough impressions to get traffic, and I of course want as large a percentage as possible of those impressions to result in interaction with people in the form of clicks. But if I look at only two metrics, conversions and average CPA are what I will focus on improving.

Lets summarize the importance ad conversions and cost per conversion (or cost per acquisition) and see why I think they are so important:

  1. Ad Conversions – A conversion of one of my ads means that someone saw an ad, and signed up. In my dashboard, you can see zero conversions across all campaigns. This doesn’t mean there weren’t any signups during this week, but it does mean that my ads didn’t drive the signups we had. Over time the number of conversions should become less important since you’ll have hundreds or thousands of conversions. Then CPA should be prioritized to make certain that you are running effective campaigns.
  2. Cost Per Acquisition – Cost per acquisition simply breaks divides your spend by the number of conversions to give you the average cost of each conversion. Once you know the value of a customer or user, you can gauge whether your CPA number (on each network) is lower than the value of gaining the customer or not. If it is, you can still optimize your can, or you can put a higher portion of your overall ad budget on that network. If your CPA is higher than what you value a new customer, then you’ll either need to shift budget away from that network or optimize that particular campaign further.

There are a few links that dive further into the topic of optimizing ad conversions and CPA that are worth taking a look at:

If you haven’t already, you can sign up today to check out the AdStage ad analytics dashboard and start optimizing your campaigns to maximize the return on your ad spending.

I tried to keep this post short. Thanks for reading and let me know if these points helped or if you have particular topics that would be more useful to your campaigns. As always, you can reach me at clark@adstage.io or send us a tweet @getadstage.

Clark Gates George