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How to select display advertising metrics and KPIs

July 27, 2023
5 minute read
display ad metrics

Understanding and optimizing display advertising metrics is crucial for any marketer looking to improve their campaigns. This blog post will serve as your comprehensive guide to everything you need to know about tracking display campaigns, setting goals, and optimizing your strategies. 

Just like the dashboard in your car provides you with vital data points to monitor your driving progress, display advertising metrics and KPIs serve as your marketing dashboard. They help you navigate the marketing landscape effectively, ensuring you're not driving blind.

Investing in display advertising without tracking metrics and KPIs is akin to driving without a dashboard. You wouldn't know where you're heading or how long it would take to reach your destination. Similarly, without the right metrics, your marketing efforts could end up directionless and ineffective.

But much like your car’s dashboard, marketers need to be selective about which metrics they pay attention to, and which metrics are so important that they rise to the status of key performance indicator. 

So let’s take some time to examine which metrics mean the most in display advertising, and how you can identify the right KPIs for your campaigns. 

How to track and measure display ad campaigns  

So, you're ready to start tracking the performance of your display ads and evaluate your campaign performance. Great! But before we identify the metrics and KPIs, it’s important to understand how they differ

Think back to grade school geometry. Remember how every square is a rectangle, but not every rectangle is a square? The same logic applies to display advertising measurement. Every KPI is a metric, but not every metric is a KPI for your business. In other words, you can monitor many metrics, but you should only measure a few KPIs. 

Here are some tips for tracking and measuring your display advertising campaigns:

Decide what you want to focus on

Start things off by choosing two or three display metrics that align most closely with your campaign goal. This could be conversions, app downloads, sales and more. Just make sure that these will strategically indicate when your campaign is successful. After all, a display advertising campaign that intends to drive brand awareness probably wouldn’t identify sales as a KPI.  

Set a goal or benchmark

Once you’ve identified the main metrics, you need to set a goal or benchmark for yourself. If sales is your main KPI, how many sales will you need to record in order to deem this campaign a success? It’s important to push yourself at this point and set the bar high. 

Use data to measure your progress toward the goal

If you’re measuring the success of your campaign through sales volume, you need some way to track how many sales are attributed to this campaign. Similarly, brand awareness campaigns may need to track website traffic, impressions, social media mentions, and more. Data is your best friend here. By implementing robust tracking systems, you can accurately measure progress. 

Adapt your campaign as needed

If your display campaign is underperforming, don’t be afraid to change it up. By rethinking the target audience, adjusting calls to action, changing imagery, or rethinking the entire creative could help you find the pathway to success. Make sure you’re always testing and optimizing your strategies.  

display ds

Display ad examples. The Nike ad ran on Google Display Network, while the ad from McDonalds Canada ran on Facebook.

Commonly used metrics for tracking display ads 

Let’s take a look at the most frequently used metrics for display advertising. 

Cost

Cost is one of the most frequently tracked metrics, yet it can mean many things to different marketers. Some only calculate the ad spend (the cost to buy the ad space and run the ads), while others include internal and overhead costs of business into the marketing cost. For example, the cost to create the ad creatives. Using the latter definition of cost can help you calculate your marketing efficiency ratio. 

Cost per impression

Cost per mille, commonly known as CPM, refers to the cost per thousand (mille means thousand in Latin) impressions. This popular metric allows you to track the average cost of 1,000 ad impressions on a media channel such as Twitter or Facebook. (We explain what impressions are below.) CPM is one of the most-tracked metrics in advertising, because it lets you quickly compare the success of different campaigns and different channels.

Imagine you are running an awareness campaign across Pinterest and Facebook for a retailer in the home decoration industry. When analyzing the data, you see that Pinterest has a lower CPM than Facebook. That means you’re spending less to reach those thousand people on Pinterest than you are on Facebook. 

Many platforms show the CPM of a campaign in the ad manager tool. But if needed, CPM is easy to calculate yourself. Just divide the cost of your ad campaign by the number of impressions you expect to receive. Then multiply that number by 1,000. In other words, CPM = (cost / impressions) x 1,000.

Ad impressions

Many marketers assume that an impression is the number of times your digital display ad is seen by human eyes. However, it’s a little trickier than that. More accurately, an impression is the number of times an ad is displayed on a webpage. 

Think of your favorite news website. Display ads are often embedded within the body of an article. Every time your ad appears in the ad space while someone is reading the article, an impression is recorded. You can’t guarantee that the article reader bothered to look at your ad, though. Because of this, some marketers question the value of measuring impressions. However, it can still give you a sense of the efficiency of your ad campaign distribution. 

Clicks and click-through rate

If you’re looking for a metric that’s a bit more tangible than impressions, click-through rate may interest you. Click-through rate (CTR) measures how many people actually click on your display ad rather than just viewing it. CTR can be a more practical metric than impressions, because it reveals interactions with your ads. 

Especially if you care about clicks to your website, is is valuable to monitor the CTR of your display campaign. And if you are using several ad creatives at the same time, you can use CTR to compare them with each other. A higher CTR means that your creative is breaking through enough with your audience to create an action. 

Cost per click

Cost per click (CPC) measures the cost you pay when someone clicks on one of your display ads. It's one of the most commonly-used metrics in the pay-per-click (PPC) model, because it reveals how much you spend on your ad campaigns. 

CPC works like this: You pay a pre-agreed amount to an ad network every time someone clicks on your ad. This amount is based on keyword competition, quality scores, your bidding strategy, and other factors. Let's say you agree to pay $0.30 per click, and your ad receives 1,000 clicks. You pay your ad network $300 (0.30 x 1,000). 

Ad frequency

Ad Frequency is another important metric in digital marketing. It refers to the average number of times a user sees your ad. Monitoring ad frequency can help you avoid overexposing your audience to the same ad, which can lead to ad fatigue and decreased engagement

Conversion rate

One of the best ways to gauge display ad performance is by tracking your conversion rate. This metric identifies the number of people who completed a specific action after clicking an ad, such as signing up to your mailing list or purchasing a product.

Conversion rate is one of the easiest metrics to measure. Just divide the total number of conversions you receive by the total number of visitors to your website. Then multiply this number by 100. For example, if 5,000 people visit your website and 50 people purchase a product, your conversion rate is 1% ((50 / 5,000) x 100).

Other display advertising metrics include:

  • Cost per Acquisition (CPA): This is a calculated metric that measures the total cost of a campaign divided by the number of conversions or acquisitions. It helps businesses understand the financial investment needed to gain a new customer.

  • Viewability: This metric tracks the impressions that were actually seen by users. An ad is considered viewable if at least 50% of it is visible in the browser window for a minimum of one second for display ads and two seconds for video ads.

  • Engagement Rate: This metric gauges the interaction a piece of content receives from an audience. It's determined by actions like clicks, shares, comments, or likes, indicating the value your audience finds in your content.

  • Bounce Rate: This metric represents the percentage of visitors who leave the site after viewing only one page. If you want to see this for a display campaign specifically, you will need to filter your website visitors data to only include website viewers that originated from your campaign. 

Tracking performance against display advertising metrics

Whatever display metrics and KPIs you choose to measure, you need a central hub for analytics and reporting that displays real-time marketing data via charts, maps, reports, and other visualizations. This hub will serve as a single source of truth for display ad data, letting you make more informed decisions about your campaigns. Choose a platform that seamlessly integrates marketing data from all your systems and presents it in a visually-appealing way without the need for lots of code.

 

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