Context Is King in Understanding Programmatic Advertising Metrics

Context Is King in Understanding Programmatic Advertising Metrics

With Nagendra Sai
Associate Director, Programmatic, True Influence

Programmatic display advertising is such a powerful tool for B2B marketers because its performance can be monitored in real time. With just a glance at a dashboard, marketers can know how many ads have been served and how many clicks have been generated.

But this clear visibility has also created a misconception that standard advertising metrics tell the whole story of how programmatic ad campaigns drive revenue. And that’s often not the case. Your CTR may be higher than average, but if those clicks aren’t converting to first-party opt-ins, you aren’t getting what you are paying for.

The success of a programmatic display campaign is defined by how well the tactics you employ support the goals of the campaign. Metrics are vital in tracking individual tactics, but without the context of how each piece fits into the revenue strategy, metrics can be misleading. This is particularly true in B2B, where programmatic display is integral to virtually every phase of an account’s complex purchase journey.

In this post, I’ll look at some common programmatic advertising metrics and discuss the applications where they typically have the most significance in evaluating the impact of your campaigns.

Metrics vs. KPI

Before I go on, just a quick note about two terms that are often used interchangeably, but actually have a meaningful difference, particularly when discussing programmatic advertising performance.

A metric is a simple measurement of a business process. Cost-per-click (CPC) is a perfect example of a metric – it’s always the result of dividing the money spent on an ad run by the number of clicks the run generates.

A KPI (Key Performance Indicator) is a measurement of how a business activity helps achieve a defined goal. While a simple metric can serve as a KPI, depending on your goals, KPIs often involve more complex analysis based on multiple metrics.

Think of it this way – if a campaign’s goal is newsletter signups, then CPC is not a meaningful KPI for that campaign. It’s still useful to know how much you are paying for clicks, but CPC does not define the success of the initiative. CPA (Cost per Acquisition), where the acquisition is defined as a newsletter signup, is the KPI here.

For B2B programmatic advertising, tracking KPIs often is accomplished with custom reporting and attribution and tracking of multiple ad interactions a prospect has likely had with programmatic campaigns. (I will discuss attribution strategies and custom reporting in another post.)

Core Programmatic Display Advertising Metrics

As I mentioned, the most basic of programmatic advertising metrics are total impressions served and the click-through rate (CTR) on those impressions. These are the building blocks of programmatic ad metrics.

Any demand-side platform (DSP) will also quickly calculate the cost per click (CPC), based on impressions and CTR, as well as whatever cost per thousand (CPM) rate you are paying per impressions, which can vary based on the terms of your agreement. Many DSPs offer a bidding range for impressions, and that variance is sometimes described as dynamic cost per thousand (dCPM).

You can think of these as the big three metrics – they are always relevant, although their importance to a specific campaign’s success depends on the customers’ purchase journey stage and what impact you’re trying to have on their decision process.

Context: Branding or Transactional?

Metrics have vastly different significance, depending on whether you’re running a branding campaign or a transactional campaign.

Take, for example, CTR. If you’re trying to elevate brand awareness for an upcoming product launch, a short animation may well have all the impact you’re looking for, and CTR isn’t a make-or-break metric. If you’re running full video creative, CTR is even less significant. In fact, a very high CTR might indicate that your audience is a little too narrow for your goal (more on that a bit later.)

However, if you’re looking to convert growing interest in your product launch into a spec sheet download, CTR becomes a far more critical indicator. It indicates how well you refined your audience by job role and additional targeting intelligence, including purchase intent. I’ll get into more good programmatic advertising metrics in an upcoming blog. It’s no wonder B2B marketers get excited about tracking programmatic results.

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