Making sense of digital benchmarks and buzzwords
Why big numbers don’t always mean big success.
What’s worth more: 100,000 impressions or 10 conversions? What does a high click-through rate actually mean? Does conversion rate matter?
The answer to those questions is: it depends—digital advertising is rarely black and white. But having a good understanding of basic metrics can help you determine what success means for your digital campaigns.
An impression is when your ad is displayed or served. 5,000 impressions mean that your ad was seen 5,000 times. When served to the right audience, a high number of impressions can do wonders for increasing brand awareness and keeping your business top-of-mind. But if actionable results are what you’re looking for, a high number of impressions may not be all it’s cracked up to be.
Reach is the total number of people who have seen your ads. A reach of 1,000 means 1,000 people (or devices) saw your ad. Where do devices come in? A single person may be counted twice if they view your ad on a smartphone and a PC.
Frequency is the average number of times a person sees your ad. Impressions ÷ reach = frequency.
If your campaign’s reach is 1,000 and it has 5,000 impressions, your frequency is 5. Each person saw your ad 5 times. For best results, we shoot for a frequency of 7 over the course of the campaign (if budget allows).
Click-through rate (CTR) is the percentage of impressions that resulted in someone clicking on your ad. Clicks ÷ impressions = CTR.
A higher CTR can indicate that your ads are relevant and engaging. Average CTRs vary by industry and ad type. Search ads generally have a higher CTR than display ads. Display ads are passively served to people to match the demographics or interests you’re targeting—showing up on websites they’re visiting. Search ads are typically served to those who are lower in the sales funnel—they are actively looking for a product or service and are closer to conversion.
A conversion is an action you want a customer to take on your website—it could be registering for an event, making a purchase, requesting an appointment, downloading a brochure, or submitting a contact form. A high number of conversions indicates a successful campaign. But not all conversions are created equal—it all depends on your ROI. A $500 purchase may be worth more than a contact form submission. But if that contact form submission turns into a $25,000 sale—well, you get the idea.
Conversion rate is the percentage of people who clicked on your ad and converted. Clicks ÷ conversions = conversion rate.
The higher the conversion rate the better, as this almost always ties to revenue (e.g., sales, lead generation) depending on what you’re measuring as a conversion. Low conversion rates don’t mean your campaigns are failing—if you know that you’re reaching the right audience, a lower conversion rate could mean that there’s an opportunity to improve your landing page. Do your customers know what you want them to do? Do you make it easy for them to do it? Analyzing your web traffic can help you see how long visitors are staying on the page and if they are engaged with your content.
Making sense of the numbers
To truly understand the benchmarks for success for your business’s digital campaigns, it’s a good idea to partner with someone who knows digital and knows how to reach your goals while being transparent about results and what they mean to your business.
As a full-stack digital agency, Strateligent can help you with developing a digital strategy, deploying targeted campaigns, tracking conversions, and analyzing your results. Contact us to see what we can do together.
President, Creative Director