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Local Advertising

How To Calculate The Effectiveness Of Advertising Online

Let’s talk now about the effectiveness of advertising online. In this article, I will touch on such important indicators as the conversion rate, click through rate and return on investment.

Thus, I will talk about each of these terms, and show you how to calculate the effectiveness of advertising online. So, let’s get started!

What is Conversion Rate (CR)?

Effectiveness Of Advertising Online

Conversion Rate or CR – Usually when we speak of conversion rate, we mean that the site, which are all the ads and all the target users, set a specific goal.

Let’s imagine that we have an online store, the purpose of which is to buy goods. For example, on a site within a day comes 2000 visitors. At the same time, a certain number of these visitors make a targeted action (purchase of goods).

Suppose that only 13 visitors made a purchase of the goods. In this case, the conversion is the ratio of the number of users who committed the targeted action to the total number of visitors, multiplied by 100%.

How can you calculate this indicator?

In our case, the evaluation of the effectiveness of advertising will be as follows …


CONVERSION = 13/2000 * 100% = 0.65%


As a result, the conversion was 0.65%. It is the conversion that largely determines the success of the advertising online campaign.

And there will be success on the part of the advertiser’s website, because the effectiveness of advertising online can be increased due to internal factors (landing pages) and external factors (advertisements). That is, increasing conversion is a very important factor in successful advertising campaign.

Keep Reading: The Concepts Of Online Advertising

What is Click Through Rate (CTR)?

Effectiveness Of Advertising Online

Click-Through-Rate or CTR – The number of clicks for the number of impressions. The clickability determines to what extent your advertising material is attractive. That is, how well an advertisement is made, selected, written and how well the banner is made.

It is clickability CTR is a very important indicator of the effectiveness of advertising online. That is, the conversion rate is the efficiency on the advertiser’s side (on landing pages). And clickability is an indicator of efficiency on the side of the advertising system.

How can you calculate this indicator?

Let’s imagine that we have created a contextual announcement, which for the week scored 3700 hits. That is, 3700 users saw our advertisement.

Of these users, only 87 people clicked on our ad. In fact, we received 87 targeted conversions to the site. Let’s calculate the clickability …


CTR = 87/3700 * 100% = 2.35%


Quite good clickability turned out. For contextual advertising it is low. And for banner advertising this is a very good indicator.

So, click-through rate shows the effectiveness of advertising online on the side of the advertising platform. That is, it shows how well we prepared an advertising campaign.

Keep Reading: 8 Tips For Advertising Online

What is Return On Investment (ROI)?

Effectiveness Of Advertising Online

Next we have a global indicator, which should be monitored by an advertising specialist so that advertising is not an easy source of traffic, but also a source of profit.

You need to track not only the number and cost of clicks (for example, the cost of subscribers or applications for credit). It is necessary to keep track of the amount of money that is returned to the business. So, this is a measure of return on investment (ROI).

How can you calculate this indicator?

Let’s assume that we conducted an advertising campaign with a budget of 100,000 dollars. Caused a number of visitors to the site (for example, in the online store). At the same time, it was with this advertising campaign that orders for the amount of 370,000 dollars were paid.

The costs associated with these orders were 75,000 dollars. It turns out that the net profit was 295,000 dollars. Return on investment will be equal to …


ROI = (295,000 – 100,000) / 100,000 * 100% = 195%


Now I will explain the meaning of return on investment, as the most important indicator of the effectiveness of advertising online. So, imagine that you spend 100,000 dollars on advertising, while you also have a net profit of 100,000 dollars.

Then it turns out that the return on investment is 0%. Thus, the result means a point of profitability. We spend 100,000 dollars and get 100,000 dollars of net profit. We do not have additional profit, but at the same time we pay back all the costs for online advertising.

In order for advertising to be really effective in the context of profit accounting, it is necessary that the ROI be above zero. If we have ROI negative, then we simply lose money and put them in the wrong advertisement. With negative ROI, advertising does not pay off.

Therefore, it is for ROI to be guided when evaluating the effectiveness of advertising online. This is the most important metric in terms of business.

That is, you are doing some kind of test advertising campaign, look at the ROI and count. If the return on investment is positive, then you can increase the investment in this type of advertising.

If the indicator is slightly negative, you can reconfigure advertising campaigns or somehow improve the site’s efficiency (for example, increase the conversion of advertising pages) and bring ROI to a positive value.

If the indicator is strongly negative, then such a source of advertising will not pay off further. It is ROI is a very important indicator of the effectiveness of advertising online, which guides business owners. Therefore, a specialist should be able to calculate ROI for various advertising campaigns.

Conclusion

So, we have analyzed the main indicators that characterize the effectiveness of advertising online. Now you know what is CR, CTR and ROI.

Also, it should not be difficult to correctly calculate and determine these parameters. In general, for a successful advertising campaign online, be sure to pay attention to such indicators. These indicators will help you calculate the effectiveness of advertising online.

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Local Advertising

8 Tips For Advertising Online

A common mistake many owners of small and medium businesses – an attempt to sell their goods to everyone. “Well, we have such cool fans / cases for smartphones / online courses!” It’s time to put up with the truth: your product is not needed by anyone, because the choice on the market is always great and there are many competitors. Therefore, advertising online is an important fact for all kinds of business.

Whom, in the end, the buyer chooses, depends on the advertisement, which should be higher in the search, more convincing and attractive than your competitors. It is highly desirable that the cost of attracting your potential client at the same time remains within reasonable limits.

Here are some practical tips to help you achieve this goal …

1) Do not cut budgets, but increase expertise

Most entrepreneurs are familiar with the basic tools of advertising online, and, it would seem, everyone knows how. Nevertheless, an experienced consultant after a cursory review will say that up to 30% of the advertising budget is spent inefficiently. The costs of network marketing can be conditionally divided into two full parts. The first of these is money, which, however, determines only half of the efficiency. The second is the effort you put in, the experience you apply and the new ideas.

By setting the right goals, choosing the tools that are optimal for yourself and not lazy to establish control points, you can double the effectiveness of advertising online.

Whatever promotional tools you use, they cannot do without your direct involvement, so the best way to optimize costs is not to cut the budget, but to pay closer attention to detail and nuances. In this, modern technologies for analyzing audiences, cost of clicks, choice of sites, etc., are very helpful. These are tools that must be learned to use.

2) Make a portrait of the ideal client

The basis of any advertising online is target audiences. Three things are important here: division, division and once again division. Identify a group of potential customers, break it into subgroups, and then do the same with them. Consider the maximum number of criteria: gender, age, marital status, income, place of residence, education, social status, hobby, place of work, psychological comfort, political beliefs, pets, favorite sport, lactose intolerance, favorite colors, etc.

The girl at 18, at 24, at 29 and at age 35 is four different people. Just like a bachelor, married or having children a man. It is important even the time spent in marriage – 1 year, 5 years or 10 years. Does your potential client live in a city of a million people or just in the regional center? How fast is their Internet, how often does they go online with a smartphone?

Do your clients prefer a country holiday? Use in advertising online associations with nature. Their prosperity is above average? Then, environmental friendliness and “new developments” are important. Do they partially overlap with gamblers? Then the word “discounts” will be more effective. Do they have more than two children? Use calm messages and focus on comfort and reliability. Sometimes the solutions are not obvious, but they are extremely simple. The same pet stores target the owners of private houses as the target audience. Why? As statistics show, they are three times more likely to breed pets.

Continue Reading: Advice and The Best Strategies To Better Write an Ad Copy

3) Select the correct message

The resulting client groups are best summarized in an Excel spreadsheet: an average of 5 to 12 lines will be obtained. In the first column there is a conventional symbol of the ideal client, in the second – its typical interests, in the third – situations in which it can stir up interest in your products or services, in the fourth – network portals that they usually visit, where they search for information, read experts or exchange tips, in the fifth – messages that can attract attention. The sixth column is a priority promotion model.

I advise you to divide all clients into those who are actively searching and those who do not plan anything, but may be interested. This is important to consider when writing a message. For the first – a short and highly competitive information. For the second – the fascinating chips.

Advertising Online

4) Do not impose, but entertain

Direct contact with the client is an important part of both sales and targeting. Any action, any discounts and special offers should be tried taking into account the maximum information about the client: gender, age, incomes, interests, priorities, opinions – all this should be included in the short questionnaire. If someone receives a financial bonus, he is more likely to sacrifice a couple of minutes of his time.

There is a more elegant way – tests. And not commercial, but most entertaining. “Find out which of the Hollywood actors you look like”, “In which country of the world you were supposed to be born” or “How your friends see you”. But why is this necessary? It’s simple. First, make yourself a list of questions that you would like to ask a potential client, and then reformulate everything as if he should understand your “strengths” from your questions.

A simple example. Do you want to understand if your clients are keen on sports? Question test: “How would you like to spend one of the holidays?” Conditional options: pictures with a bicycle, a TV, a book, a mug of beer. Want to create a new packaging for the product and hesitate, which color scheme to choose? Then in one of the items put photos of neutral landscapes with different combinations of colors and evaluate the results. In the final test, give a set of 8-10 abstract results, any of which is extremely flattering to the client. What for? Users like to share these results in their stream, and you get good feedback and free clicks.

5) Separate the “passengers” from customers

Surely most of you regularly receive from your employees a report on the amount of traffic to the site. But absolute numbers should not mislead you: if it’s free traffic, then the rule is simple: the bigger it is, the better for you.

If you use promotional tools, it is important to divide the visitors into customers and “passengers”.

Here we look at the cost of attraction and conversion. We want more sales – we set up targeted and contextual advertising online, we wait on the site of ordinary visitors – we work with social networks and publications in the media. So immediately put advertisers the right tasks, any report must necessarily contain conversion numbers, so that there was an opportunity to minimize expenses for sites from which “one-click” visitors come.

Continue Reading: Contextual Advertising: The Way To Get To The First Page Of Search

6) Offer interesting content

Despite the “overfeeding” of Internet users with information, meaningful and interesting projects can promote themselves. Here the first place is not the budget, but the quality of the content. You already know your potential audience and areas of interest, make it a point of reference. The ideal post for social networks should be small, emotional, charged, carry something new, accompanied by a picture-lure.

SMM-specialists are quoted in the advertising online market low, but they take a little for their services. The only reason to resort to their help is to make several posts look super-popular (with dozens of reposts and hundreds of likes). And let the overwhelming majority of these “active users” be completely useless as customers, they will create their share of visibility.

In social media, you can use the technology of partial post locking: to read the text in full, the user should bring your page to friends or put it. As the statistics show, about 0.3-0.5% of people visiting the page mark it as they liked, just to get access to the main content: after all, to see how a hamster eats tiny sausages, one can make a non-binding click.

Advertising Online

7) Make your posts super popular

For most companies, the only reason to engage in SMM can only be the generation of well-distributed content. Recover the time and financial costs of working in social networks can only be provided a large number of likes and reposts. If this does not happen, then the corporate blog is no more than a mirror of the company’s website. How to successfully distribute your content on the network?

For big prizes – luxury smartphone and laptop – with the right positioning you can get a few thousand reposts. By the way, it is not necessary to expose your own goods (especially if you do not have them), you can connect partners. For example, at one time I had a contract, which offered the opportunity for users to download e-books from their library for free. And since interesting publications can be selected for almost any target audience, this partnership looked very worthy and brought a good result.

Another technique for distributing content is to attract paid “volunteers”. There are many users on the network who earn mini-SMM campaigns among their friends and subscribers. Their services cost a minimum of money, the achieved figures are easily read, and the final price can be reduced by offering recommendations, lines on the resume or long-term contract.

Continue Reading: How to Improve Your Ads on Google AdWords without Spending More!

8) Use the video

To promote your company, you can use not only a text format, it is excellent, if your business, goods and services can be accompanied by a video. Videoblogs, reviews, master classes and are a promotion strategy designed for a long time. If the time of active life of the text is one to two days, then the videos are viewed during the year, and sometimes they can shoot after a considerable time after filling. In terms of information noise, most users, including even teenage girls, have learned to identify advertising online content in the first few seconds. Therefore, show cleverness: videos on your subject will be most in demand with maximum informativeness and bringing practical examples that will be useful to ordinary Internet users. This is a great way to tell about the business for free.

Some more useful tips

In your advertising online campaign there will certainly be failures, surprises and force major. But this does not mean that risks cannot be reduced.

First, always store all information in at least two independent databases. Optimum use of not only your own equipment, but also cloud storage.

Secondly, by hiring a contractor-outsourcer, talk to his competitors, in advance learn the working conditions with them, in order to switch to a reserve option in case of surprises. If you work with speakers or experts, be prepared that at the last minute they can cancel any activities, and prepare for the speeches of internal specialists.

Counting the load on your site, immediately calculate the maximum possible value in the current year, and then increase it by five times, because no one canceled the suddenly shooting stock, seasonal fluctuations and a holiday factor. Have access to a site from mobile devices – in all offices there are problems with the electric power, and at any providers – with communication. Finally, make it your habit to put yourself in the shoes of customers. Evaluate your advertising online not as a seller, but as a buyer.