The Metrics
The Basics
Now that you know where you are marketing, with what message, and on what mediums, it is important to understand how to measure success. The following are key digital metrics to monitor the success of your digital campaign(s).
Conversions are the basic success metric for digital advertising and can be a complex topic in digital advertising. The driver of the complexity is that everyone has their own opinion on what counts as a conversion. On one hand, you could argue that any action a consumer takes in the shopping process is a good thing, and the more of those that happen, the more sales will happen. Some vendors will call something as simple as scrolling down a page on a particular vehicle a conversion because they wanted to see more and were engaged. On the other hand, some would say that is just an event that you can track but that a conversion only happens when a dealer can take direct action, such as a lead form. There is no right or wrong answer; the key is to be sure you understand what your vendor is calling a conversion and if you are going to compare that to something else so that you have apples to apples data. Unfortunately some vendors try to hide the details to inflate the perception of their performance. The details are easily tracked to a very granular level. You should ask to see the detailed conversions in the platform itself (Google, Bing, etc.) and see how that compares to the vendor’s reporting platform.
Conversions typically occur after clicking an ad. For example, the consumer might search for your product, click your ad, land on your site and get directions to the store. The conversion happened a few steps down the path, but the ad the consumer clicked will get credit for that conversion. The most common forms of conversions are:
- Phone Calls (from Ad & Website)
- Lead Form Submissions
- Get Directions
- Website Visits
- Store Visits
Measuring conversions doesn’t tell the full story. Understanding what is driving the conversions is equally important. All mediums should not be measured the same:
- Search is a direct lead generation source and beyond conversions should be looked at for CPCs and CTRs.
- Video is better analyzed as a cost per completed view and view rate.
- Social is measured primarily via CPM but the outcome is commonly measured in engagements (likes, shares, etc.).
- Display is billed most often on a CPM model, but performance is commonly looked at through view-thru conversions indicating a consumer saw your ad and then came back to your website later.
In order to capture all of the data available, you should use a platform such as Google Analytics and request your vendors to link the ad campaigns to your account. This will allow you to see the impact of all of your advertising in one place with consistent reference points.
Advanced
The most valuable aspect of your digital advertising efforts will be your understanding of how to measure performance. Here are a few advanced techniques for measuring success:
Impression Share: Impression share is one of the most commonly misunderstood metrics in digital advertising. Impression share is not a performance metric. The misperception has been mostly driven by vendors claiming they are doing a great job by reporting a high impression share on Search campaigns. Impression share is simply the number of times your ad shows up for a keyword divided by the number of times it could have. If you ran an ad on one keyword phrase with an exact match ad type for “Tortilla Chips Shaped Like Telephones” and you searched for it, it is very likely you won’t have any competition and will show up every time, which of course was just that once. Congratulations, you have achieved 100% impression share. Where impression share is important is to understand how much additional opportunity you have in the campaigns you are running within the geography the ad is being served.
CTR + CPC: Similar to impression share, CTR and CPC reporting commonly doesn’t tell the full story. These metrics are only as useful as the data they are being compared against. Is your CTR high? Are your CPCs low? You can’t answer that without knowing a number of other factors. Is a vendor only running brand ads, which are commonly the cheapest and most clicked? Are they running an ad for every vehicle you sell which competes with other dealers, other brands, and 3rd-party aggregators, driving up the CPC and driving down the CTR? You might be able to get better stats, but it can be at the cost of selling less by advertising fewer of your products and services.
Geo-Targeting: Understanding where your ads perform and where they don’t can cost you dramatically. One thought would be that you can expand your advertising as far as you want because you don’t pay for anything that isn’t clicked. However, in reality, each time your ad shows and isn’t clicked, it is lowering your CTR, which impacts your Quality Score, which impacts your CPC. As a result, running a campaign in a market where consumers just don’t have interest in your ads negatively impacts your performance in your backyard as well. Any time your CPC goes up, your clicks go down, followed by leads, and in turn sales.
Store Visits: “Store Visits” is a Google reporting conversion metric that tracks actual onsite visits to the dealership. Results are based on data from users’ phones with location tracking enabled. Google does not make this metric available for all dealers. Each dealership has to have enough data for Google to ensure the advertiser cannot determine a specific consumer based on the data provided for privacy concerns. Google defines the requirements as:
- Receive thousands of ad clicks and viewable impressions.
- Have a Google My Business account linked to your Google Ads account and verified.
- Ensure location extensions are active in your account.
- Have sufficient Store Visits data on the backend to attribute to ad click or viewable impressions traffic and pass our user privacy thresholds.
Attribution: Accurate attribution is the holy grail of digital advertising, and it is commonly unattainable. A consumer’s journey includes many touchpoints across many mediums, which means multiple sources deserve varying degrees of credit for the conversion. A good place to start is by looking at your Search campaigns in Google. By default, your campaigns will be set up with last click attribution, which means that no matter how many campaigns a consumer clicked or what other mediums they consume along the way, the last ad they clicked on gets all the credit. This can be very misleading. Imagine that you have a pre-owned 2016 Jeep Cherokee on your Mitsubishi lot and are running search ads for all of your inventory. A consumer clicks your ad, pokes around your website and has some interest in the vehicle. Like many shoppers, they decide to keep looking to see what else is out there on Cars.com, AutoTrader, etc. In the end they determined you had the Cherokee they wanted at the right price, so they go back to the search engine and search for your dealership where they found the vehicle. With last click attribution, all of the credit would go to your brand campaign, and it would appear that your pre-owned campaign isn’t working at all; in reality, without it, they would have just clicked on the next ad, which could be a 3rd party that sells you the lead at a higher price. Google has a number of different attribution types:
- First Click
- Last Click
- Position-Based
- Linear
- Time Decay
- Data-Driven
The best model is Data-Driven Attribution, which effectively says if you took this click out the equation, it is less likely to convert but if you take that one out, it doesn’t impact conversions much at all. The challenge is that Google needs enough data to be able to determine that impact and is only available on accounts with a large volume of conversion data. When Data-Driven is not an option, Linear is a good approach to give equal credit to all of the aspects involved, but it is certainly not perfect.