If you are a small business owner, you may have tried to run a few social media or google ads yourself. But some of the terminology of reporting terms can be confusing. What is your CPC? Whats the difference between Impressions and Reach? Today we are breaking down a few digital marketing terms that you will see often!
ROI: Return on Investment. Your return on investment is in dollar amounts, how many sales you got from your digital marketing ads vs. how much you spent. So say you spent $1000 on a marketing campaign and it landed you 3 sales totaling $3000. Your product takes $500 to make each ($1500 for 3 products) then you would use the calculation advertising cost divided by actual sale cost (including how much it takes to make your product), times 100.
($1000/$1500) x 100= 66%. So your ROI for that campaign was 66%. It gets a little harder if your are in the service industry or aren’t ecommerce selling products online (say you sell $100,000 machines and aren’t going to be accepting payments online), but you can still estimate sales based on a certain campaign. Some ideas on how to do this is include an offer code like “use code GOTEAM22 in our store to receive 5% off” that way you can track how many offer codes were used and that can determine how many sales you got. You can also ask people to take surveys after purchase, or for very small brick and mortars, simply ask each purchaser how they heard about you.
CPC: Cost Per Click. Cost per click is used frequently and can vary from campaign based on type of product, type of campaign and budget. By definition, a CPC is the amount of money you had to spend for each click. Some frequent click types might be click to website, click offer, click to call, etc. You can often make a “maximum cost per click” if you know you don’t want to pay more than a certain amount per click in your campaign.
CTR: Click Through Rate. Click through rate is the rate at which your ads were clicked. You calculate this by taking total clicks on the ad/number of impressions your ad got= CTR.
For example, heres one of our customers CTR’s for a google campaign for a month:
Total Clicks (803) /Total Impressions (24,459)= 3.2 % CTR
Bounce Rate: Your bounce rate is the rate at which people only stay on one page of your website and don’t search further or complete a purchase, often the page they were directed to in your ads. There are tons of opinions out there about whether or not bounce rates matter depending on what type of website you have (ecommerce vs. informational only, etc.) For some of our customers, they want to drive people to a particular product page on their website, but the items are not sold online, so it would be normal for someone to just visit that page, then move on. Where this become really important though is if you are selling items online, then if they just go to the product page and don’t go a step further and purchase, then that would be considered a bounce and this stat can be helpful to you because you can analyze what is it about your site, price, etc. that so many people are bouncing from.
Impressions vs. Reach: this one can be a little hard to determine if you haven’t been running ads or shared content for a while online. Impressions are the number of times your ad showed on peoples feed or while they were searching online, this number does not reflect if people saw it, engaged with it or made any clicks. It was simply delivered to them. Reach on the other hand, is the total number of people who actually saw your content. For more on this, theres a great article from Sprout Social here: https://sproutsocial.com/insights/reach-vs-impressions/
Conversions: Conversion actions will be different depending on what type of website you have and what your goals are. By definition, a conversion is any desirable action someone takes on your website or ad. This can be anything from completing a purchase, to watching a video, calling your business, downloading a brochure, staying on the page for more than 1 min. You will need to analyze what it is you want people to do when they reach your website or click on your ad, then you will be able to set up your correct conversion and get reports on it based on what action you want people to take. Both google and social media are good at letting you customize your conversion goal, and easily see how many people took that action.
Read more about setting your goals here.